Salesforce.com 2013 Annual Report Download - page 14

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at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements
and other information regarding issuers that file electronically with the SEC at www.sec.gov. The contents of
these websites are not incorporated into this filing. Further, the Company’s references to the URLs for these
websites are intended to be inactive textual references only.
ITEM 1A. RISK FACTORS
The risks and uncertainties described below are not the only ones facing us. Other events that we do not
currently anticipate or that we currently deem immaterial also may affect our results of operations, cash flows
and financial condition.
Risks Related to Our Business and Industry
Defects or disruptions in our service could diminish demand for our service and subject us to substantial
liability.
Because our service is complex and incorporates a variety of hardware and proprietary and third-party
software, our service may have errors or defects that could result in unanticipated downtime for our subscribers
and harm to our reputation and our business. Internet-based services frequently contain undetected errors when
first introduced or when new versions or enhancements are released. We have from time to time found defects in
our service and new errors in our service may be detected in the future. In addition, our customers may use our
service in unanticipated ways that may cause a disruption in service for other customers attempting to access
their data. As we acquire companies, we may encounter difficulty in incorporating the acquired technologies into
our service and maintaining the quality standards that are consistent with our brand and reputation. Since our
customers use our service for important aspects of their business, any errors, defects, disruptions in service or
other performance problems could hurt our reputation and may damage our customers’ businesses. As a result,
customers could elect to not renew, or delay or withhold payment to us, we could lose future sales or customers
may make warranty or other claims against us, which could result in an increase in our provision for doubtful
accounts, an increase in collection cycles for accounts receivable or the expense and risk of litigation.
Interruptions or delays in service from our third-party data center hosting facilities could impair the
delivery of our service and harm our business.
We currently serve our customers from third-party data center hosting facilities located in the United States
and other countries. Any damage to, or failure of, our systems generally could result in interruptions in our
service. Interruptions in our service may reduce our revenue, cause us to issue credits or pay penalties, cause
customers to terminate their subscriptions and adversely affect our renewal rates and our ability to attract new
customers. Our business will also be harmed if our customers and potential customers believe our service is
unreliable.
As part of our current disaster recovery arrangements, our production environment and all of our customers’
data is currently replicated in near real-time in a facility located in the United States. Companies and products
added through acquisition may be temporarily served through alternate facilities. We do not control the operation
of any of these facilities, and they are vulnerable to damage or interruption from earthquakes, floods, fires, power
loss, telecommunications failures and similar events. They may also be subject to break-ins, sabotage, intentional
acts of vandalism and similar misconduct. Despite precautions taken at these facilities, the occurrence of a
natural disaster or an act of terrorism, a decision to close the facilities without adequate notice or other
unanticipated problems at these facilities could result in lengthy interruptions in our service. Even with the
disaster recovery arrangements, our service could be interrupted.
As we continue to add data centers and add capacity in our existing data centers, we may move or transfer
our data and our customers’ data. Despite precautions taken during this process, any unsuccessful data transfers
may impair the delivery of our service.
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