Carbonite 2011 Annual Report Download - page 16

Table of Contents
being released, it is difficult to predict the problems we may encounter in developing versions of our solutions for use on these mobile devices, and we
may need to devote significant resources to the creation, support, and maintenance of such services, which could adversely affect our operating results.
If we are unable to expand our base of SMB customers, our business could be adversely affected.
In 2010, we introduced the first version of our backup solution targeted toward SMBs, which are generally companies that are too small to have a
dedicated in-
house IT staff. We are committing substantial resources to the expansion and increased marketing of our SMB offerings. If we are unable to
market and sell our solutions to SMBs with competitive pricing and in a cost-effective manner, our ability to grow our revenue and achieve profitability
will be harmed. We expect it will be more difficult and expensive to attract and retain SMB customers than consumers, because SMBs:
In addition, SMBs frequently have limited budgets and are more likely to be significantly affected by economic downturns than larger, more
established companies. As a result, they may choose to spend funds on items other than our solutions, particularly during difficult economic times. If we
are unsuccessful in meeting the needs of potential SMB customers, it could adversely affect our future growth and operating results.
If we are unable to improve market recognition of and loyalty to our brand, or if our reputation were to be harmed, we could lose customers or fail
to increase the number of our customers, which could harm our revenue, operating results, and financial condition.
Given our consumer and SMB market focus, maintaining and enhancing the Carbonite brand is critical to our success. We believe that the
importance of brand recognition and loyalty will increase in light of increasing competition in our markets. We plan to continue investing substantial
resources to promote our brand, both domestically and internationally, but there is no guarantee that our brand development strategies will enhance the
recognition of our brand. Some of our existing and potential competitors have well-established brands with greater recognition than we have. If our
efforts to promote and maintain our brand are not successful, our operating results and our ability to attract and retain customers may be adversely
affected. In addition, even if our brand recognition and loyalty increases, this may not result in increased use of our solutions or higher revenue.
Our offerings, as well as those of our competitors, are regularly reviewed in computer and business publications. Negative reviews, or reviews in
which our competitors’ products and services are rated more highly than our solutions, could negatively affect our brand and reputation. From time-to-
time, our customers express dissatisfaction with our solutions, including, among other things, dissatisfaction with our customer support, our billing
policies, our handling of personal data, and the way our solutions operate. If we do not handle customer complaints effectively, our brand and reputation
may suffer, we may lose our customers’ confidence, and they may choose not to renew their subscriptions. In addition, many of our customers
participate in online blogs about computers and internet services, including our solutions, and our success depends in part on our ability to generate
positive customer feedback through such online channels where consumers seek and share information. If actions we take or changes we make to our
solutions upset these customers, their blogging could negatively affect our brand and reputation. Complaints or negative publicity about our solutions or
billing practices could adversely impact our ability to attract and retain customers and our business, financial condition, and operating results.
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may have different or much more complex needs than those of individual consumers, such as archiving, version control, enhanced security
requirements and other forms of encryption and authentication, which our solutions may not adequately address;
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frequently cease operations due to the sale or failure of their business; and
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are difficult to reach without using more expensive, targeted sales campaigns.