VMware 2013 Annual Report Download - page 29

Table of Contents
If we are unable to successfully address the challenges of integrating offerings based upon open source technology into our business, our ability to realize
revenues from such offerings will be negatively affected and our development costs may increase.
Acquisitions could disrupt our business, cause dilution to our stockholders and harm our business, financial condition and results of operations.
We have acquired in the past and plan to acquire in the future other businesses, products or technologies. Acquisitions can involve significant risks and
uncertainties, which include:
27
• 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 and services 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 or services 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 or services. 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 or terms of service,
and thus could, among other consequences, prevent us from continuing to distribute the software code subject to the modified license or terms of
service.
• 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 and services.
• disrupting our ongoing operations, diverting management from day-to-day responsibilities, increasing our expenses, and adversely impacting our
business, financial condition and results of operations;
•
failure of the acquired business to further our business strategy;
• uncertainties in achieving the expected benefits of an acquisition, including enhanced revenues, technology, human resources, cost savings,
operating efficiencies and other synergies;
•
reducing cash available for operations, stock repurchase programs and other uses and resulting in potentially dilutive issuances of equity securities or
the incurrence of debt;
• incurring amortization expense related to identifiable intangible assets acquired that could impact our operating results; Difficulty integrating the
operations, systems, technologies, products and personnel of the acquired businesses effectively;
•
retaining and motivating key personnel from acquired companies;
• assuming the liabilities of the acquired business, including acquired litigation-related liabilities, and potential litigation arising from a proposed or
completed acquisition;
• maintaining good relationships with customers or business partners of the acquired business or our own customers as a result of any integration of
operations;
• product liability, customer liability or intellectual property liability associated with the sale of the acquired business’
s products;
• unidentified issues not discovered during the diligence process, including issues with the acquired business’s intellectual property, product quality,
security, privacy practices, accounting practices or legal contingencies;
•
maintaining or establishing acceptable standards, controls, procedures or policies with respect to the acquired business; and
•
risks relating to the challenges and costs of closing a transaction.