Adobe 2009 Annual Report Download - page 37

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We are also devoting significant resources to the development of technologies and service offerings in markets where
we have a limited operating history, including the enterprise, government and mobile and device markets. In the enterprise
and government markets, we intend to increase our focus on vertical markets such as education, financial services,
manufacturing, and the architecture, engineering and construction markets and horizontal markets such as training and
marketing. These new offerings and markets require a considerable investment of technical, financial and sales resources, and
a scalable organization. Many of our competitors may have advantages over us due to their larger presence, larger developer
network, deeper experience in the enterprise, government and mobile and device markets, and greater sales and marketing
resources. In the mobile and device markets, our intent is to partner with device makers, manufacturers and
telecommunications carriers to embed our technology on their platforms, and in the enterprise and government market our
intent is to form strategic alliances with leading enterprise and government solutions and service providers to provide
additional resources to further enable penetration of such markets. If we are unable to successfully enter into strategic
alliances with device makers, manufacturers, telecommunication carriers and leading enterprise and government solutions
and service providers, or if they are not as productive as we anticipate, our market penetration may not proceed as rapidly as
we anticipate and our results of operations could be negatively impacted.
Revenue from our new businesses may be difficult to predict.
As previously discussed, we are devoting significant resources to the development of product and service offerings
where we have a limited operating history. This makes it difficult to predict revenue and revenue may decline quicker than
anticipated. Additionally, we have a limited history of licensing products and offering services in certain markets such as the
government and enterprise market and may experience a number of factors that will make our revenue less predictable,
including longer than expected sales and implementation cycles, decision to open source certain of our technology initiatives,
potential deferral of revenue due to multiple-element revenue arrangements and alternate licensing arrangements. If any of
our assumptions about revenue from our new businesses prove incorrect, our actual results may vary materially from those
anticipated, estimated or projected.
For instance, the SaaS business model we utilize in our Omniture business unit typically involves selling services on a
subscription basis pursuant to service agreements that are generally one to three years in length. Although many of our
service agreements contain automatic renewal terms, our customers have no obligation to renew their subscriptions for our
services after the expiration of their initial subscription period upon providing timely notice of non-renewal and we cannot
provide assurance that these subscriptions will be renewed at the same or higher level of service, if at all. Moreover, under
some circumstances, some of our customers have the right to cancel their service agreements prior to the expiration of the
terms of their agreements. We cannot be assured that we will be able to accurately predict future customer renewal rates. Our
customers’ renewal rates may decline or fluctuate as a result of a number of factors, including their satisfaction or
dissatisfaction with our services, the prices of our services, the prices of services offered by our competitors, mergers and
acquisitions affecting our customer base, reductions in our customers’ spending levels, or declines in consumer Internet
activity as a result of economic downturns or uncertainty in financial markets. If our customers do not renew their
subscriptions for our services or if they renew on less favorable terms to us, our revenues may decline.
We may not realize the anticipated benefits of past or future acquisitions, and integration of these acquisitions may disrupt
our business and management.
We have in the past and may in the future acquire additional companies, products or technologies. Most recently, we
completed the acquisition of Omniture in October 2009. We may not realize the anticipated benefits of an acquisition and
each acquisition has numerous risks. These risks include:
• difficulty in assimilating the operations and personnel of the acquired company;
• difficulty in effectively integrating the acquired technologies, products or services with our current technologies,
products or services;
• difficulty in maintaining controls, procedures and policies during the transition and integration;
• entry into markets in which we have no or limited direct prior experience and where competitors in such markets
have stronger market positions;