Computer Associates 2009 Annual Report Download - page 22

competition from any of these sources could result in price reductions or displacement of our products, which could have
a material adverse effect on our business, financial condition, operating results and cash flow.
Our competitors include large vendors of hardware and operating system software and service providers. The
widespread inclusion of products that perform the same or similar functions as our products bundled within computer
hardware or other companies’ software products, or services similar to those provided by us, could reduce the perceived
need for our products and services, or render our products obsolete and unmarketable. Furthermore, even if these
incorporated products are inferior or more limited than our products, customers may elect to accept the incorporated
products rather than purchase our products. In addition, the software industry is currently undergoing consolidation as
software companies seek to offer more extensive suites and broader arrays of software products and services, as well as
integrated software and hardware solutions. This consolidation may adversely affect our competitive position, which
could materially adversely affect our business, financial condition, operating results and cash flow. Refer to Item 1,
“Business — (c) Narrative Description of the Business — Competition,” for additional information.
Our business may suffer if we are not able to retain and attract adequate qualified personnel, including key managerial,
technical, marketing and sales personnel.
We operate in a business where there is intense competition for experienced personnel in all of our global markets. We
depend on our ability to identify, recruit, hire, train, develop and retain qualified and effective personnel. Our ability to do
so depends on numerous factors, including factors that we cannot control, such as competition and conditions in the
local employment markets in which we operate. Our future success depends in large part on the continued contribution
of our senior management and other key employees. A loss of a significant number of skilled managerial or other
personnel could have a negative effect on the quality of our products. A loss of a significant number of experienced and
effective sales personnel could result in fewer sales of our products. Our failure to retain qualified employees in these
categories could materially adversely affect our business, financial condition, operating results and cash flow.
Failure to adapt to technological change in a timely manner could materially adversely affect our business.
If we fail to keep pace with technological change in our industry, that failure would have an adverse effect on our
revenue and earnings. We operate in a highly competitive industry characterized by rapid technological change, evolving
industry standards, changes in customer requirements and frequent new product introductions and enhancements.
During the past several years, many new technological advancements and competing products entered the marketplace.
The distributed systems and application management markets in which we operate are far more crowded and
competitive than our traditional mainframe systems management markets.
Our ability to compete effectively and our growth prospects for all of our products depend upon many factors, including
the success of our existing distributed systems products, the timely introduction and success of future software
products, and the ability of our products to perform well with existing and future leading databases and other platforms
supported by our products. We have experienced long development cycles and product delays in the past, particularly
with some of our distributed systems products, and may experience delays in the future. In addition, we have incurred,
and expect to continue to incur, significant research and development costs, as we introduce new products. If there are
delays in new product introductions or less-than-anticipated market acceptance of these new products, we will have
invested substantial resources without realizing adequate revenues in return, which could materially adversely affect our
business, financial condition, operating results and cash flow.
If our products do not remain compatible with ever-changing operating environments we could lose customers and the
demand for our products and services could decrease, which could materially adversely affect our business, financial
condition, operating results and cash flow.
The largest suppliers of systems and computing software are, in most cases, the manufacturers of the computer
hardware systems used by most of our customers. Historically, these companies have from time to time modified or
introduced new operating systems, systems software and computer hardware. In the future, such new products from
these companies could incorporate features that perform functions currently performed by our products, or could require
substantial modification of our products to maintain compatibility with these companies’ hardware or software.
Although we have to date been able to adapt our products and our business to changes introduced by hardware
manufacturers and system software developers, there can be no assurance that we will be able to do so in the future.
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