Computer Associates 2013 Annual Report Download - page 27

cash flows. The vast majority of our subscription and maintenance revenue in any particular reporting period comes from
contracts signed in prior periods, generally pursuant to contracts ranging in duration from three to five years.
Any of these events could affect the manner in which we are able to conduct business, including within a particular industry
sector or market and 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 enterprise solutions markets
in which we operate (including non-mainframe platforms from physical to virtual and cloud) 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
business strategy, depend upon many factors, including the success of our existing enterprise solutions, the timely
introduction and success of future software products and services, including those that we acquire or develop, 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 enterprise solutions, 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 and integrate products into solution sets. If there are delays in new
product introduction or solution set integration, or if there is less-than-anticipated market acceptance of these new products
or solution sets, 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.
We are subject to intense competition in product and service offerings and pricing, and we expect to face
increased competition in the future, which could either diminish demand for or inhibit growth of our products
and, therefore, reduce our sales, revenue and market presence.
The markets for our products are intensely competitive, and we expect product and service offerings and pricing
competition to increase. Some of our competitors have longer operating histories, greater name recognition, a larger
installed base of customers in any particular market niche, larger technical staffs, established relationships with hardware
vendors, or greater financial, technical and marketing resources. Furthermore, our business strategy is predicated upon our
ability to develop and acquire products and services that address customer needs and are accepted by the market better
than those of our competitors.
We also face competition from numerous smaller companies that specialize in specific aspects of the highly fragmented
software industry, and from shareware authors that may develop competing products. In addition, new companies enter the
market on a frequent and regular basis, offering products that compete with those offered by us. Moreover, certain
customers historically have developed their own products that compete with those offered by us. The competition may affect
our ability to attract and retain the technical skills needed to provide services to our customers, forcing us to become more
reliant on delivery of services through third parties. This, in turn, could increase operating costs and decrease our revenue,
profitability and cash flow. Additionally, competition from any of these sources could result in price reductions or
displacement of our products, which could materially adversely affect 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
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