Computer Associates 2013 Annual Report Download - page 29

•We may not be able to realize the benefits of recognized goodwill and intangible assets and this may result in the
potential impairment of these assets.
These factors could materially adversely affect our business, results of operations, financial condition and cash flow,
particularly in the case of a large acquisition or number of acquisitions. To the extent we issue shares of stock or other
rights to purchase stock, including options, to pay for acquisitions or to retain employees, existing stockholders’ interests
may be diluted and income per share may decrease.
If we do not adequately manage, evolve and protect our managerial and financial reporting systems and
processes, including the successful implementation of our enterprise resource planning software, our ability to
manage and grow our business may be harmed.
Our ability to successfully implement our business plan and comply with regulations requires effective planning and
management systems and processes. We need to continue to improve and implement existing and new operational and
financial systems, procedures and controls to manage our business effectively in the future. As a result, we have licensed
enterprise resource planning software, consolidated certain finance functions into regional locations, and are in the process
of expanding and upgrading our operational and financial systems. Any delay in the implementation of, or disruption in the
transition to, our new or enhanced systems, procedures or internal controls, could adversely affect our ability to accurately
forecast sales demand, manage our supply chain, achieve accuracy in the conversion of electronic data and records, and
report financial and management information, including the filing of our quarterly or annual reports with the SEC, on a
timely and accurate basis. Failure to properly or adequately address these issues, as well as managing and protecting our
infrastructure, could result in the diversion of management’s attention and resources, adversely affect our ability to manage
our business and materially adversely affect our business, financial condition, results of operations and cash flow. Refer to
Item 9A, ‘‘Controls and Procedures,’’ for additional information.
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, 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. Recently, many established enterprise
hardware vendors have begun to bundle in basic management functionality software with their hardware offerings, putting
additional competitive pressures on independent management software vendors like us. 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 deliver distinctive management
functionality, beyond the basic functionality now being bundled by many hardware vendors, that delivers significant and
differentiating value to customers could materially adversely affect our business, financial condition, operating results and
cash flow.
In addition, the emergence of cloud computing means that many of our enterprise solutions customers are themselves
undergoing a radical shift in the way they deliver IT services to their businesses. The shift towards delivering infrastructure
and Software-as-a-Service (SaaS) from the cloud may negatively affect our ability to sell IT management solutions to our
traditional enterprise solutions customers. While we believe we adequately understand this risk and are taking steps in our
product and business strategy to plan for it, failure to adapt our products, solutions, delivery models and sales approaches to
effectively plan for cloud computing may adversely affect our business. If we are not successful in anticipating the rate of
market change towards the cloud computing paradigm and evolving with it by delivering solutions for IT management in the
cloud computing environment, customers may forgo the use of our products in favor of those with comparable functionality
delivered via the cloud, which could materially adversely affect our business, financial condition, operating results and cash
flow.
Our customers’ data centers and IT environments may be subject to hacking or other cybersecurity threats,
harming customer relationships and the market perception of the effectiveness of our products.
An actual or perceived breach of our customers’ network security allowing access to our customers’ data centers or other
parts of their IT environments, including access to confidential and personally identifiable information maintained by a
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