8x8 2014 Annual Report Download - page 26

4 changes in the competitive dynamics of our market, including consolidation among competitors or customers;
4 lengthy sales cycles and/or regulatory approval cycles;
4 new product introductions by us or our competitors;
4 market acceptance of new or existing services and features;
4 the mix of our customer base and sales channels;
4 the mix of services sold;
4 the number of additional customers, on a net basis;
4 the amount and timing of costs associated with recruiting, training and integrating new employees;
4 unforeseen costs and expenses related to the expansion of our business, operations and infrastructure;
4 continued compliance with industry standards and regulatory requirements;
4 introduction and adoption of our cloud communications and collaboration services in markets outside of the United States; and
4 general economic conditions.
Due to these and other factors, we believe that period-to-period comparisons of our results of operations are not meaningful and should not be
relied upon as indicators of our future performance. It is possible that in some future periods our results of operations may be below the
expectations of public market analysts and investors. If this were to occur, the price of our common stock would likely decline significantly.
Our products must comply with industry standards, FCC regulations, state, local, country-specific and international regulations, and
changes may require us to modify existing products and/or services.
In addition to reliability and quality standards, the market acceptance of telephony over broadband IP networks is dependent upon the adoption
of industry standards so that products from multiple manufacturers are able to communicate with each other. Our cloud-based communications
and collaboration services rely heavily on communication standards such as SIP, MGCP and network standards such as TCP/IP and UDP to
interoperate with other vendors' equipment. There is currently a lack of agreement among industry leaders about which standard should be used
for a particular application, and about the definition of the standards themselves. These standards, as well as audio and video compression
standards, continue to evolve. We also must comply with certain rules and regulations of the FCC regarding electromagnetic radiation and safety
standards established by Underwriters Laboratories, as well as similar regulations and standards applicable in other countries. Standards are
frequently modified or replaced. As standards evolve, we may be required to modify our existing products or develop and support new versions
of our products. We must comply with certain federal, state and local requirements regarding how we interact with our customers, including
marketing practices, consumer protection, privacy, and billing issues, the provision of 9-1-1 emergency service and the quality of service we
provide to our customers. The failure of our products and services to comply, or delays in compliance, with various existing and evolving
standards could delay or interrupt volume production of our communications and collaboration services, subject us to fines or other imposed
penalties, or harm the perception and adoption rates of our service, any of which would have a material adverse effect on our business, financial
condition or operating results.
For example:
4 The FCC has implemented network neutrality rules in the past and is considering new rulemaking proceedings regarding network
neutrality. In December 2010, the FCC adopted new net neutrality rules that would protect services like ours from such interference.
Several parties sought judicial review of the FCC's net neutrality rules, and in January 2014 the anti-blocking and unreasonable
discrimination provisions of the rules were vacated. While the court ruling did not foreclose the FCC from adopting anti-blocking or non-
discrimination rules, interference with our service or higher charges for using our service could cause us to lose existing customers,
impair our ability to attract new customers, and harm our revenue and growth. These problems could also arise in international markets.
Most foreign countries have not adopted formal net neutrality rules like those adopted by the FCC.
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