Adobe 2010 Annual Report Download - page 43

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We devote significant resources to address security vulnerabilities through engineering more secure products, enhancing
security and reliability features in our products and systems, code hardening, deploying security updates to address security
vulnerabilities and improving our incident response time. The cost of these steps could reduce our operating margins. Despite
these efforts, actual or perceived security vulnerabilities in our products and systems may lead to claims against us and harm
our reputation, and could lead some customers to seek to return products, to stop using certain services, to reduce or delay
future purchases of products or services, or to use competing products or services. Customers may also increase their
expenditures on protecting their existing computer systems from attack, which could delay adoption of new technologies.
Any of these actions by customers could adversely affect our revenue.
Some of our businesses rely on us or third-party service providers to host and deliver services, and any interruptions or
delays in our service or service from these third parties, security or privacy breaches, or failures in data collection could
expose us to liability and harm our business and reputation.
Some of our businesses and services, including our online store at adobe.com and Omniture business unit, rely on
services hosted and controlled directly by us or by third parties. Because we hold large amounts of customer data and host
certain of such data in third-party facilities, a security incident may compromise the integrity or availability of customer data,
or customer data may be exposed to unauthorized access. Unauthorized access to customer data may be obtained through
break-ins, breach of our secure network by an unauthorized party, employee theft or misuse, or other misconduct. It is also
possible that unauthorized access to customer data may be obtained through inadequate use of security controls by customers.
While strong password controls, IP restriction and account controls are provided and supported, their use is controlled by the
customer. As such, this could allow accounts to be created with weak passwords, which could result in allowing an attacker
to gain access to customer data. Additionally, failure by customers to remove accounts of their own employees, or granting of
accounts by the customer in an uncontrolled manner, may allow for access by former or unauthorized customer employees. If
there were ever an inadvertent disclosure of personal information, or if a third party were to gain unauthorized access to the
personal information we possess on behalf of our customers, our operations could be disrupted, our reputation could be
harmed and we could be subject to claims or other liabilities. In addition, such perceived or actual unauthorized disclosure of
the information we collect or breach of our security could result in the loss of customers and harm our business.
Because of the large amount of data that we collect and manage on behalf of our customers, it is possible that hardware
or software failures or errors in our systems could result in data loss or corruption or cause the information that we collect to
be incomplete or contain inaccuracies that our customers regard as significant. Furthermore, our ability to collect and report
data may be delayed or interrupted by a number of factors, including access to the Internet, the failure of our network or
software systems, security breaches or significant variability in visitor traffic on customer Websites. In addition, computer
viruses may harm our systems causing us to lose data, and the transmission of computer viruses could expose us to litigation.
We may also find, on occasion, that we cannot deliver data and reports to our customers in near real time because of a
number of factors, including significant spikes in consumer activity on their Websites or failures of our network or software.
We may be liable to our customers for damages they may incur resulting from these events, such as loss of business, loss of
future revenues, breach of contract or for the loss of goodwill to their business. In addition to potential liability, if we supply
inaccurate information or experience interruptions in our ability to capture, store and supply information in near real time or
at all, our reputation could be harmed and we could lose customers.
On behalf of certain of our customers using our services, we collect and store information derived from the activities of
Website visitors, which may include anonymous and/or personal information. This enables us to provide such customers with
reports on aggregated anonymous or personal information from and about the visitors to their Websites in the manner
specifically directed by each such individual customer. Federal, state and foreign government bodies and agencies have
adopted or are considering adopting laws regarding the collection, use and disclosure of this information. Therefore, our
compliance with privacy laws and regulations and our reputation among the public body of Website visitors depend on such
customers’ adherence to privacy laws and regulations and their use of our services in ways consistent with such visitors’
expectations. We also rely on representations made to us by customers that their own use of our services and the information
we provide to them via our services do not violate any applicable privacy laws, rules and regulations or their own privacy
policies. We ask customers to represent to us that they provide their Website visitors the opportunity to “opt-out” of the
information collection associated with our services, as applicable. We do not formally audit such customers to confirm
compliance with these representations. If these representations are false or if such customers do not otherwise comply with
applicable privacy laws, we could face potentially adverse publicity and possible legal or other regulatory action.