Citrix 2000 Annual Report Download - page 11

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9
In addition, alternative products exist for web applications in the
internet software market that directly or indirectly compete with the Company's
products. Existing or new products that extend internet software to provide
database access or interactive computing can materially impact the Company's
ability to sell its products in this market. Competitors in this market include
Microsoft, AOL Time Warner, and other makers of web server application and
browser software. As markets for the Company's products continue to develop,
additional companies, including companies with significant market presence in
the computer hardware, software and networking industries, may enter the markets
in which the Company competes and further intensify competition. These
competitors and other potential competitors may have significantly greater
financial, technical, sales, marketing, support and other resources than the
Company. There can be no assurance that the Company will be able to establish
and maintain a market position in the face of increased competition. Although
the Company believes that price has historically been a less significant
competitive factor than product performance, reliability and functionality, the
Company believes that price competition may become more significant in the
future. The Company may not be able to maintain its historic prices, and an
inability to do so could adversely affect the Company's business, results of
operations and financial condition.
PROPRIETARY TECHNOLOGY
The Company's success is heavily dependent upon proprietary technology. The
Company has filed patent applications in the United States and foreign
countries. A number of patents have been issued domestically and in foreign
countries, while other patent applications are currently pending. The Company
also takes steps to protect its technology under copyright laws. However, patent
protection and existing copyright laws afford only limited protection for the
Company's technology. In addition, the laws of some foreign countries do not
protect the Company's proprietary rights to the same extent, as do the laws of
the United States. Accordingly, the Company also relies on trade secret
protection and confidentiality and proprietary information agreements to protect
its proprietary technology. The loss of any material trade secret, trademark,
trade name or copyright could have a material adverse effect on the Company.
There can be no assurance that the Company's efforts to protect its proprietary
technology rights will be successful. Despite the Company's precautions, it may
be possible for unauthorized third parties to copy certain portions of the
Company's products or to obtain and use information that the Company regards as
proprietary. A significant portion of the Company's sales is derived from the
licensing of Company packaged products under "shrink wrap" license agreements
that are not signed by licensees and electronic licensing agreements, which may
be unenforceable under the laws of certain foreign jurisdictions. Although the
Company does not believe that its products infringe on the rights of third
parties, there can be no assurance that third parties will not assert
infringement claims against the Company in the future or that any such assertion
will not result in costly litigation or require the Company to obtain a license
to proprietary technology rights of such parties. In addition, there can be no
assurance that such licenses will be available on reasonable terms or at all.
While the Company's competitive position may be affected by its ability to
protect its proprietary information, the Company believes that because of the
rapid pace of technological change in the industry, factors such as the
technical expertise, knowledge and innovative skill of the Company's management
and technical personnel, its strategic relationships, name recognition, the
timeliness and quality of support services provided by the Company and its
ability to rapidly develop, enhance and market software products may be more
significant in maintaining the Company's competitive position.
EMPLOYEES
As of December 31, 2000, the Company had approximately 1,400 employees. The
Company's relations with its French employees are governed by certain labor
regulations in the region. The Company believes its relations with employees are
good.
9