Vistaprint 2010 Annual Report Download - page 25

Form 10-K
with no assurance that our revenues will increase. Any interruptions that cause any of our websites to
be unavailable, reduce our order fulfillment performance or interfere with customer service operations
could result in lost revenue and negative publicity, damage our reputation and brand, and cause our
business and results of operations to suffer. A number of factors or events could cause interruptions
or interference in our websites or operations, including:
• human error, software errors, power loss, telecommunication failures, fire, flood, extreme
weather, political instability, acts of terrorism, war, break-ins and security breaches, contract
disputes, and other similar events. In particular, both Bermuda, where substantially all of
the computer hardware necessary to operate our websites is located in a single facility, and
Jamaica, the location of most of our customer service and design service operations, are
subject to a high degree of hurricane risk and extreme weather conditions.
• undetected errors or design faults in our technology, infrastructure and processes that may
cause our websites to fail. In the past, we have experienced delays in website releases and
customer dissatisfaction during the period required to correct errors and design faults in our
websites that caused us to lose revenue. In the future, we may encounter additional issues,
such as scalability limitations, in current or future technology releases.
• our failure to maintain adequate capacity in our computer systems to cope with the high
volume of visits to our websites, particularly during promotional campaign periods and in
the seasonal peak in demand that we experience in our second fiscal quarter.
We do not presently have redundant systems operational in multiple locations. In addition, we
are dependent in part on third parties for the implementation and maintenance of certain aspects of
our communications and production systems, and because many of the causes of system
interruptions or interruptions of the production process may be outside of our control, we may not be
able to remedy such interruptions in a timely manner, or at all. We do carry business interruption
insurance to compensate us for losses that may occur if operations at our facilities are interrupted, but
these policies do not address all potential causes of business interruptions we may experience, and
any proceeds we may receive may not fully compensate us for all of the revenue we may lose.
We face intense competition.
The markets for small business marketing products and services and consumer custom
products, including the printing and graphic design market, are intensely competitive, highly
fragmented and geographically dispersed, with many existing and potential competitors. We expect
competition for online small business marketing and consumer custom products and services to
increase in the future. The increased use of the Internet for commerce and other technical advances
have allowed traditional providers of these products and services to improve the quality of their
offerings, produce and deliver those products and services more efficiently and reach a broader
purchasing public. Competition may result in price pressure, reduced profit margins and loss of market
share, any of which could substantially harm our business and results of operations. Current and
potential competitors include:
• traditional storefront printing and graphic design companies;
• office superstores, drug store chains, food retailers and other major retailers targeting small
business and consumer markets, such as Staples, UPS Stores, Office Depot, Costco,
CVS, Schleker, Walgreens, Carrefour and Wal-Mart;
• wholesale printers such as Taylor Corporation and Business Cards Tomorrow;
• other online printing and graphic design companies, many of which provide printed
products and services similar to ours, such as Overnight Prints, 123Print, Moo.com and
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