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Table of Contents
Cost of license revenues decreased in 2013 compared to 2012 primarily due to a decrease of $37 in amortization of capitalized software and
a decrease of $11 in IT development costs. These decreases were partially offset by an increase of $18 in intangible amortization expense.
No amortization expenses was recorded during the year ended December 31, 2014 as all previously capitalized software development costs
had been fully amortized as of December 31, 2013 . We do not expect significant amortization of capitalized software development costs in
future years.
Cost of Services Revenues
Our cost of services revenues primarily includes the costs of personnel and related overhead to deliver technical support for our products
and to provide our professional services. Additionally, our costs of services revenues include costs related to our IT development efforts and
depreciation on equipment supporting our service offerings. As we continue to invest in and grow business from our SaaS and professional
services offerings, we expect our total costs of services revenues to continue to increase.
Cost of services revenues increased in 2014 compared to 2013 primarily driven by the investment and growth in our SaaS and professional
services offerings, which led to higher costs. The increase includes growth in cash-based employee-related expenses of $124 due to incremental
growth in headcount, both organic and through acquisitions, and an increase in technical support costs of $21. Additionally, increases of $25 in
equipment and depreciation costs also contributed to the increases in cost of services revenues. The increase in 2014 was partially offset by a
decrease of $10 in operating expenses related to Pivotal.
Cost of services revenues increased in 2013 compared to 2012 primarily due to an increase of $39 in cash-based employee-related expenses
and an increase of $27 in costs we incurred to provide technical support. These increases were generally proportional to the increases in services
revenues for the same comparable period. Equipment and depreciation costs also contributed to the increase in cost of services revenues. The
increases were partially offset by a decrease of $32 of operating expenses related to Pivotal.
Research and Development Expenses
Our research and development expenses include the personnel and related overhead associated with the development of our product
software and service offerings.
Research and development expenses increased in 2014 compared to 2013. The increases were primarily due to growth in cash-based
employee-related expenses of $125 and increases in stock-based compensation of $17, driven by incremental growth in headcount, both organic
and through acquisitions. Equipment and depreciation expenses increased by $27 in 2014. The increase in 2014 was partially offset by a decrease
of $15 in research and development expenses related to Pivotal.
Research and development expenses increased in 2013 compared to 2012 primarily due to growth in cash-based employee-related expenses
of $85, which was primarily driven by planned incremental growth in headcount. Additionally, contractor costs, stock-based compensation
expense and equipment and depreciation expenses also increased by $48 during 2013 compared to the prior year. The increases in expenses were
partially offset by a decrease of $59 of research and development expenses related to Pivotal.
46
For the Year Ended December 31,
2014 vs. 2013
2013 vs. 2012
2014
2013
2012
$ Change
% Change
$ Change
% Change
Cost of services revenues
$
683
$
491
$
456
$
192
39
%
$
35
8
%
Stock-based compensation
42
29
28
13
43
1
4
Total expenses
$
725
$
520
$
484
$
204
39
$
36
7
% of Services revenues
21
%
18
%
19
%
For the Year Ended December 31,
2014 vs. 2013
2013 vs. 2012
2014
2013
2012
$ Change
% Change
$ Change
% Change
Research and development
$
995
$
855
$
789
$
141
16
%
$
66
8
%
Stock-based compensation
244
227
210
17
7
17
8
Total expenses
$
1,239
$
1,082
$
999
$
157
15
$
82
8
% of Total revenues
21
%
21
%
22
%