Enom 2014 Annual Report Download - page 25

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our technologies or cease offering the implicated solutions unless and until we can re-engineer them to avoid infringement or change
the use of the implicated open source software. In addition to risks related to license requirements, use of certain open source software
can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties,
indemnities or other contractual protections with respect to the software (for example, non-infringement or functionality). Our use of
open source software may also present additional security risks because the source code for open source software is publicly available,
which may make it easier for hackers and other third parties to determine how to breach our sites and systems that rely on open source
software. Any of these risks could be difficult to eliminate or manage, and, if not addressed, could have a material adverse effect on
our business, financial condition and results of operation.
The interruption or failure of our information technology and communications systems, or those of third parties that we rely upon,
could adversely affect our business, financial condition and results of operations.
The availability of our products and services depends on the continuing operation of our information technology and
communications systems. Any damage to or failure of our systems, or those of third parties that we rely upon (e.g., co-location
providers for data servers, storage devices, and network access) could result in interruptions in our service, which could reduce our
revenue and profits, and damage our brand. We have previously experienced certain server outages and computer distributed denial of
service attacks, and any future server outages at our data center facilities or distributed denial of service attacks may cause all or
portions of our online properties to become unavailable or impact service to our content creation studio. Our systems are also
vulnerable to damage or interruption from natural disasters, terrorist attacks, power loss, telecommunications failures, computer
viruses or other attempts to harm our systems, and one of our data centers is located in an area with a high risk of major earthquakes.
Our data centers are also subject to break-ins, sabotage and intentional acts of vandalism, and to potential disruptions if the operators
of these facilities have financial difficulties. Some of our systems are not fully redundant, and our disaster recovery planning is
currently underdeveloped and does not account for all eventualities. The occurrence of a natural disaster, a decision to close a facility
we are using without adequate notice for financial reasons or other unanticipated problems at our data centers could result in lengthy
interruptions in our service. Delays or interruptions in our service may cause our users, advertisers, customers, artists and freelance
professionals to become dissatisfied with our offerings and could adversely affect our business.
Furthermore, third-party service providers may experience an interruption in operations or cease operations for any reason. If we
are unable to agree on satisfactory terms for continued data center hosting relationships, we would be forced to enter into a
relationship with other service providers or assume hosting responsibilities ourselves. If we are forced to switch hosting facilities, we
may not be successful in finding an alternative service provider on acceptable terms or in hosting the computer servers ourselves. We
may also be limited in our remedies against these providers in the event of a failure of service. We also rely on third-parties to provide
certain components of our technology platform, such as hardware and software providers, and to serve as operators for our content
delivery networks, or CDNs. A failure or limitation of service or available capacity by any of these third-party providers could
adversely affect our business, financial condition and results of operations.
We rely on technology infrastructure and a failure to update or maintain this technology infrastructure, or difficulty scaling and
adapting our existing technology and network infrastructure to accommodate increased traffic, could adversely affect our business.
Significant portions of our content, products and services are dependent on technology infrastructure that was developed over
multiple years. To be successful, our network infrastructure has to perform well and be reliable. The greater the user traffic and the
greater the complexity of our products and services, the more computing power we will need. In the future, we may spend substantial
amounts to purchase or lease data centers and equipment, upgrade our technology and network infrastructure to handle increased
traffic on our owned and operated online properties and roll out new products and services. Updating and replacing our technology
infrastructure could be challenging to implement and manage, take time to test and deploy, cause us to incur substantial costs, cause us
to suffer data loss, delays or interruptions in service or result in inefficiencies or operational failures. If we do not successfully update
our technology and network infrastructure as needed, or if we experience inefficiencies and operational failures during such updates,
the quality of our products and services and our users’ experience could decline. This could damage our reputation and lead us to lose
current and potential users, advertisers, customers, artists and freelance professionals. Failure to update our technology infrastructure
as new technologies become available may also put us in a weaker position relative to a number of our key competitors. Competitors
with newer technology infrastructure may have greater flexibility and be in a position to respond more quickly than us to new
opportunities, which may impact our competitive position in certain markets and adversely affect our business. The costs associated
with any adjustments to our technology and network infrastructure could also harm our operating results. Cost increases, loss of traffic
or failure to accommodate new technologies could harm our business, revenue and financial condition.