VMware 2010 Annual Report Download - page 26

Table of Contents
party solutions embodying new technologies and the emergence of new industry standards could make our existing and future software solutions
obsolete and unmarketable. We may not be able to develop updated products that keep pace with technological developments and emerging
industry standards and that address the increasingly sophisticated needs of our customers or that interoperate with new or updated operating
systems and hardware devices or certify our products to work with these systems and devices. As a result, we may not be able to accurately
predict the lifecycle of our software solutions, and they may become obsolete before we receive the amount of revenues that we anticipate from
them. There is no assurance that any of our new offerings would be accepted in the marketplace. Significant reductions in server-related costs or
the rise of more efficient infrastructure management software could also affect demand for our software solutions. As hardware and processors
become more powerful, we will have to adapt our product and service offerings to take advantage of the increased capabilities. For example,
while the introduction of more powerful servers presents an opportunity for us to provide better products for our customers, the migration of
servers to quad-core and greater multi-core microprocessor technology also allows an end-user with a given number of licensed copies of our
software to more than double the number of virtualization machines run per server socket without having to purchase additional licenses from us.
If any of the foregoing events were to occur, our ability to retain or increase market share and revenues in the virtualization software market
could be materially adversely affected.
Our success depends upon our ability to develop new products and services, integrate acquired products and services and enhance our
existing products and services and develop appropriate business and pricing models.
If we are unable to develop new products and services, integrate acquired products and services, enhance and improve our products and
support services in a timely manner or position and/or price our products and services to meet market demand, customers may not buy new
software licenses from us or renew software license updates and product support. In addition, information technology standards from both
consortia and formal standards-setting forums as well as de facto marketplace standards are rapidly evolving. We cannot provide any assurance
that the standards on which we choose to develop new products will allow us to compete effectively for business opportunities in emerging areas
such as cloud computing.
New product development and introduction involves a significant commitment of time and resources and is subject to a number of risks
and challenges including:
In addition, if we cannot adapt our business models to keep pace with industry trends, our revenues could be negatively impacted. For
example, if we increase our adoption of subscription-based pricing models for our products, we may fail to set pricing at levels appropriate to
maintain our revenue streams or our customers may choose to deploy products from our competitors that they believe are priced more favorably.
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• managing the length of the development cycle for new products and product enhancements, which has frequently been longer than
we originally expected;
•
managing customers
’
transitions to new products, which can result in delays in their purchasing decisions;
•
adapting to emerging and evolving industry standards and to technological developments by our competitors and customers;
•
entering into new or unproven markets with which we have limited experience;
•
tailoring our business and pricing models appropriately as we enter new markets and respond to competitive pressures and
technological changes;
•
incorporating and integrating acquired products and technologies; and
•
developing or expanding efficient sales channels.