Support.com 2007 Annual Report Download - page 37

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial
statements and the related notes included elsewhere in this Form 10-K. The following discussion includes forward-looking statements. Please see the
section entitled"Forward-Looking Statements and Risk Factors" in Item 1A of this Report for important information to consider when evaluating these
statements.
Overview
SupportSoft provides software and services designed to make technology work. Advances in computer processing power, data transmission speeds, wireless
communications and other areas of technology have the potential to enable and enrich daily life. Too often, however, technology proves frustrating to all but the
most expert users. SupportSoft's mission is to bridge this gap, and to enable technology to fulfill its promise.
In January 2008, we reorganized the company and began operating our business in two segments, consumer and enterprise. We also appointed an executive
vice president to lead each of the business units. Additionally, we began tracking profitability by segment and providing this information to our Chief Executive
Officer. Accordingly, beginning in 2008, we plan to provide segment information for each business unit. Our consumer segment is a technology-enabled services
business launched in 2007 to provide consumers with relief from frustrating technology problems. Our enterprise segment consists of our traditional business in
which we license technical support software to telecommunications and cable companies, digital service providers and corporate IT departments.
In our consumer segment, we provide premium technology support to consumers over the phone and the internet for a fee. We offer our services to
consumers through retailers, digital service providers and other companies who provide technology products and services to consumers. We also provide our
services directly to consumers through www.support.com. Our new consumer offerings grow out of our traditional products, technology and expertise but
address a new market with a new business model.
Our enterprise customers use our software to resolve technical problems for their customers efficiently and effectively, thereby improving customer
satisfaction and reducing support costs. Digital service providers use our products to automate the installation, activation and verification of broadband services,
to reduce the cost and improve the quality of technical support, and to enable the remote management of devices located at customer premises. Corporate IT
departments and IT outsourcing firms use our software to improve the cost-effectiveness and efficiency of their support through an integrated portfolio of
proactive service, self service and assisted service products.
Almost all of our revenue to date has been derived from our traditional enterprise customers and has consisted of software license fees and fees for
maintenance, consulting, hosting and training services. Over the last three years, we have licensed our software to enterprise customers predominately on a
perpetual basis in which we recognize the license revenue up front, assuming all criteria for revenue recognition under the applicable accounting rules have been
met. Maintenance fees relating to perpetual software licenses result in ratable revenue over the period of the maintenance term, which is generally one year.
Consulting and training revenues are generally recognized as the services are performed or in accordance with predefined project milestones. Hosting fees are
recognized ratably over the term of the hosting arrangement. Revenue from our consumer offerings have been derived predominantly from services that are
generally paid on a per transaction basis. For the year ended December 31, 2007, revenues from our consumer segment were approximately $1.0 million.
33
Source: SUPPORTSOFT INC, 10-K, March 13, 2008