Support.com 2006 Annual Report Download - page 21

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contracts. Our customers may not renew maintenance contracts or purchase additional products and services. In addition, as we
introduce new products, our current customers may not require or desire the functionality of our new products and may not ultimately
purchase these products. If our customers do not renew maintenance contracts or do not purchase additional products and services, our
operating results would suffer.
We are seeking to increase our international revenues and if our revenue from this effort does not exceed the expense of
establishing and maintaining international operations, our business could suffer.
We are seeking to increase our international revenues. For the years ended December 31, 2004, 2005, and 2006, international
revenue was 11%, 21% and 23% of total revenue, respectively. We have limited experience in international operations and may not
be able to compete effectively in international markets or effectively manage our operations in various countries. If we do not generate
enough revenue from international operations to offset the expense of these operations, our operating results could suffer. Risks we
face in conducting business internationally include:
• costs of staffing and managing international operations;
• smaller customers with less ability to pay United States rates for software and services;
• difficulty in reaching geographically dispersed customers;
• differing technology standards and legal considerations;
• longer sales cycles;
• dependence on local vendors and consultants;
• difficulties in staffing and managing international operations, including the difficulty in managing a geographically dispersed
workforce in compliance with diverse local laws and customs;
• potential adverse tax consequences;
• changes in currency exchange rates and controls;
• difficulties in maintaining effective internal control over financial reporting as a result of a geographically−dispersed workforce
and customers;
• longer collection cycles for accounts receivable; and
• the effects of external events such as terrorist acts and any related conflicts or similar events worldwide.
Our operating results will suffer if we do not expand and manage our professional services organization effectively.
Clients that license our software typically engage our professional services organization to assist with installation and
implementation of our software and related consulting services. Revenue from professional services represented a substantial portion
of our total revenue for the year ended December 31, 2006. We plan to further increase the number of professional services personnel,
especially internationally, to meet customer needs. We may not be able to recruit the professional services personnel we need or retain
our current professional services personnel because competition for qualified professional services personnel is intense. New
professional services personnel will require training and education and take time to reach full productivity.
In addition, we cannot be certain that our professional services business will operate in a profitable manner. We have generally
billed our customers for professional services on a time and material basis, using an agreed upon daily rate. However, customers have
increasingly requested various contract
17
Source: SUPPORTSOFT INC, 10−K, March 16, 2007