VMware 2010 Annual Report Download - page 24

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Table of Contents
If an author or other third party that distributes such open source software were to allege that we had not complied with the conditions of
one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations. If our defenses were
not successful, we could be subject to significant damages, enjoined from the distribution of our products that contained the open source
software and required to comply with the foregoing conditions, which could disrupt the distribution and sale of some of our products. In
addition, if we combine our proprietary software with open source software in a certain manner, under some open source licenses we could be
required to release the source code of our proprietary software, which could substantially help our competitors develop products that are similar
to or better than ours.
In addition to risks related to license requirements, usage of open source software can lead to greater risks than use of third party
commercial software, as open source licensors generally do not provide warranties or assurance of title or controls on origin of the software. In
addition, many of the risks associated with usage of open source such as the lack of warranties or assurances of title, cannot be eliminated, and
could, if not properly addressed, negatively affect our business. We have established processes to help alleviate these risks, including a review
process for screening requests from our development organizations for the use of open source and conducting appropriate due diligence of the
use of open source in the products developed by companies we acquire, but we cannot be sure that all open source software is submitted for
approval prior to use in our products or is discovered during due diligence.
The product offerings from our recent acquisitions, SpringSource and Zimbra, rely upon and incorporate open source software technologies
that subject us to additional risks and challenges, which could result in increased development expenses, delays or disruptions to the release
or distribution of those software solutions, and increased competition.
In September 2009, we completed our acquisition of SpringSource and, in February 2010, we completed our acquisition of Zimbra. Each is
a software business that broadly uses open source in its software solutions. Software solutions that are substantially or mostly based on open
source software subject us to a number of risks and challenges:
21
•
If open source software programmers, most of whom we do not employ, do not continue to develop and enhance open source
technologies, our development expenses could be increased and our product release and upgrade schedules could be delayed.
•
One of the characteristics of open source software is that anyone can modify the existing software or develop new software that
competes with existing open source software. As a result, competition can develop without the degree of overhead and lead time
required by traditional proprietary software companies. It is also possible for new competitors with greater resources than ours to
develop their own open source solutions, potentially reducing the demand for, and putting price pressure on, our solutions.
•
It is possible that a court could hold that the licenses under which our open source products are developed and licensed are not
enforceable or that someone could assert a claim for proprietary rights in a program developed and distributed under them. Any
ruling by a court that these licenses are not enforceable, or that open source components of our product offerings may not be liberally
copied, modified or distributed, may have the effect of preventing us from distributing or developing all or a portion of our products.
In addition, licensors of open source software employed in our offerings may, from time to time, modify the terms of their license
agreements in such a manner that those license terms may no longer be compatible with other open source licenses in our offerings or
our end-user license agreement, and thus could, among other consequences, prevent us from continuing to distribute the software
code subject to the modified license.
•
Actions to protect and maintain ownership and control over our intellectual property could adversely affect our standing in the open
source community, which in turn could limit our ability to continue to rely on this community, upon which we are dependent, as a
resource to help develop and improve our open source products.