Computer Associates 2009 Annual Report Download - page 23

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Failure to adapt our products in a timely manner to such changes or customer decisions to forgo the use of our
products in favor of those with comparable functionality contained either in their hardware or operating system could
have a material adverse effect on our business, financial condition, operating results and cash flow.
Certain software that we use in our products is licensed from third parties and thus may not be available to us in the
future, which has the potential to delay product development and production and, therefore, could materially adversely
affect our business, financial condition, operating results and cash flow.
Some of our solutions contain software licensed from third parties. Some of these licenses may not be available to us in
the future on terms that are acceptable to us or allow our products to remain competitive. The loss of these licenses or
the inability to maintain any of them on commercially acceptable terms could delay development of future products or
the enhancement of existing products.
We may also choose to pay a premium price for such a license in certain circumstances where continuity of the
licensed product would outweigh the premium cost of the license. The unavailability of these licenses or the necessity of
agreeing to commercially unreasonable terms for such licenses could have a material adverse effect on our business,
financial condition, operating results and cash flow.
Certain software we use is from open source code sources, which, under certain circumstances, may lead to unintended
consequences and, therefore, could materially adversely affect our business, financial condition, operating results and
cash flow.
Some of our products contain software from open source code sources. The use of such open source code may subject
us to certain conditions, including the obligation to offer our products that use open source code for no cost. We
monitor our use of such open source code to avoid subjecting our products to conditions we do not intend. However,
the use of such open source code may ultimately subject some of our products to unintended conditions, so that we are
required to take remedial action that may divert resources away from our development efforts and therefore could have
a material adverse effect on our business, financial condition, operating results and cash flow.
Discovery of errors in our software could materially adversely affect our revenue and earnings and subject us to product
liability claims, which may be costly and time consuming.
The software products we offer are inherently complex. Despite testing and quality control, we cannot be certain that
errors will not be found in current versions, new versions or enhancements of our products after commencement of
commercial shipments. If new or existing customers have difficulty deploying our products or require significant
amounts of customer support, our operating margins could be adversely affected. Moreover, we could face possible
claims and higher development costs if our software contains errors that we have not detected or if our software
otherwise fails to meet our customers’ expectations. Significant technical challenges also arise with our products
because our customers license and deploy our products across a variety of computer platforms and integrate them with
a number of third-party software applications and databases. These combinations increase our risk further because, in
the event of a system-wide failure, it may be difficult to determine which product is at fault; thus, we may be harmed by
the failure of another supplier’s products. As a result of the foregoing, we could experience:
•Loss of or delay in revenue and loss of market share;
•Loss of customers, including the inability to do repeat business with existing key customers;
•Damage to our reputation;
•Failure to achieve market acceptance;
•Diversion of development resources;
•Increased service and warranty costs;
•Legal actions by customers against us that could, whether or not successful, be costly, distracting and time-
consuming;
•Increased insurance costs; and
•Failure to successfully complete service engagements for product installations and implementations.
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