Support.com 2007 Annual Report Download - page 27

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business. To this end, we have undertaken reductions in our workforce in the fourth quarter of 2007. All of these changes place a strain on our management, and
our administrative, technical, operational and financial infrastructure. In addition, reductions in our workforce could make it difficult to motivate and retain
remaining employees or attract needed new employees, and could also affect our ability to deliver products and services in a timely fashion.
Our exposure to the credit risks of our customers and resellers could adversely affect our operating results and financial condition.
To sell to some of our customers, we may be required to take risks of uncollectible accounts. We may be exposed to similar risks relating to third party
resellers and other sales partners, as we intend to increasingly utilize such parties as we expand into new geographic regions. Additionally, as we have expanded
our business internationally, we have experienced longer payment terms and collection cycles from customers outside the United States. While we monitor these
situations carefully and attempt to take appropriate measures to protect ourselves by recognizing revenue upon collection of accounts from customers we deem to
have credit risks and upon sell-through by resellers, it is possible that we may have to write down or write off doubtful accounts. Such write-downs or write-offs
would negatively affect our operating results for the period in which they occur, and, if large, could have a material adverse effect on our operating results and
financial condition.
Our future product and service offerings may not achieve market acceptance.
If we fail to develop enhanced versions of our software in a timely manner or to provide products and services that achieve rapid and broad market
acceptance, we may not maintain or expand our market share. We may fail to identify new product and service opportunities for our current market or new
markets that we enter in the future. In addition, our existing products may become obsolete if we fail to introduce new products or product enhancements that
meet new customer demands, support new standards or integrate with new or upgraded versions of packaged applications or operating systems. We have limited
control over factors that affect market acceptance of our product and services, including:
•
the willingness of companies to transition to automated solutions; and
•
customer preferences for competitors' solutions or other technologies.
Our products depend on, and work with, products containing complex software; if our products fail to perform properly due to errors in the software,
we may need to devote resources to correct the errors or compensate for losses from these errors and our reputation could be harmed.
Our products depend on complex software, both internally developed and licensed from third parties. Also, our customers may use our products with other
companies' products, which may also contain complex software. Complex software often contains errors and may not perform properly. These errors could result
in:
•
delays in product shipments;
•
unexpected expenses and diversion of resources to identify the source of errors or to correct errors, whether or not the error is later
determined to be related to our software;
•
damage to our reputation;
•
loss of or delay in revenue and loss of market share;
•
loss of customers;
•
failure to achieve market acceptance;
23
Source: SUPPORTSOFT INC, 10-K, March 13, 2008