Computer Associates 2011 Annual Report Download - page 25

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 Part I, 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 and to attract and
retain talent needed to execute our growth strategy. 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 changes and introduce new software products and services in a timely manner
could materially adversely affect our business.
If we fail to keep pace with, or in certain cases lead, technological change in our industry, that failure could materially
adversely affect our business. We operate in a highly competitive industry characterized by rapid technological change,
evolving industry standards, and changes in customer requirements and delivery methods. 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, including those associated with our growth
strategy, depend upon many factors, including the success of our existing distributed systems products, the timely
introduction and success of future software products and related delivery methods, and the ability of our products to perform
well with existing and future leading databases and other platforms supported by our products that address customer needs
and are accepted by the market. 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 there is 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. 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 materially adversely affect our business, financial condition, operating
results and cash flow.
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