Support.com 2007 Annual Report Download - page 28

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contractual penalties, demands, claims and litigation and related defense costs;
•
increased service and warranty costs; and
•
increased insurance costs.
In our consumer offerings, we generally use our own products to diagnose and resolve consumer technology problems. If our products fail to perform well
in this environment, our consumer offerings would suffer and may not be successful.
Our software may not operate with the hardware and software platforms that are used by our customers now or in the future, and, as a result, our
business and operating results may suffer.
We currently serve a customer base with a wide variety of constantly changing hardware, software and networking platforms. For example, 64-bit
microprocessors are becoming increasingly important to our customer base. If we fail to release versions of our software that are compatible with operating
systems, software applications or hardware devices used by our customers, our business and operating results would suffer. Our future success also depends on
the continuing ability of our products to inter-operate with multiple platforms and packaged applications used by our customer base and on our management of
software being developed by third parties for our customers or for use with our products.
We rely on third-party technologies and our inability to use or integrate third-party technologies could delay product or service development.
We intend to continue to license technologies from third parties, including applications used in our research and development activities and technologies
such as third-party search engine technology, which are integrated into our products and services. Our use of technologies licensed from third parties poses
certain risks. Some of the third-party technologies we license may be provided under "open source" licenses, which may have terms that require us to make
generally available our modifications or derivative works based on such open source code. Our inability to obtain or integrate third-party technologies with our
own products could delay product and service development until equivalent compatible technology can be identified, licensed and integrated. These third-party
technologies may not continue to be available to us on commercially reasonable terms or at all. We may fail to successfully integrate any licensed technology
into our products or services, which would harm our business and operating results. Third-party licenses also expose us to increased risks that include:
•
risks of product malfunction after new technology is integrated;
•
the diversion of resources from the development of our own proprietary technology; and
•
our inability to generate revenue from new technology sufficient to offset associated acquisition and maintenance costs.
Interruptions or delays in service from our third-party Web hosting provider could impair the delivery of our services and harm our business.
We serve certain of our customers through a third-party hosting facility located in the United States. We do not control the operation of this facility, and it is
vulnerable to damage or interruption from fires, floods, telecommunications and connectivity failures, power failures, and similar events. This facility is also
subject to risks from vandalism, break-ins, intrusion, and similar intentional misconduct. Despite precautions taken at this facility such as disaster recovery
planning, a natural disaster, act of terrorism or other unanticipated problem could cause lengthy interruptions in the availability of our services and hosted
software offerings. Interruptions in our services could reduce our revenue, increase
24
Source: SUPPORTSOFT INC, 10-K, March 13, 2008