Citrix 2000 Annual Report Download - page 26

Download and view the complete annual report

Please find page 26 of the 2000 Citrix annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 84

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84

24
standard emerges or if the Company otherwise fails to achieve wide acceptance of
the ICA protocol as a standard for supporting Windows or UNIX applications, the
Company's business, operating results and financial condition could be
materially adversely affected. Microsoft includes as a component of Windows
Server Operating Systems its Remote Desktop Protocol (RDP), which has certain of
the capabilities of the Company's ICA protocol, and may offer customers a
competitive solution. The Company believes that its success is dependent on its
ability to enhance and differentiate its ICA protocol, and foster broad
acceptance of the ICA protocol based on its performance, scalability,
reliability and enhanced features. In addition, the Company's ability to win
broad market acceptance of its ICA protocol will depend upon the degree of
success achieved by its strategic partners in marketing their respective
platforms, product pricing and customers' assessment of its technical,
managerial service and support expertise. If another standard emerges or if the
Company fails to achieve wide acceptance of the ICA protocol as a standard for
supporting Windows and UNIX applications, the Company's business, operating
results and financial condition could be materially adversely affected.
Dependence Upon Strategic Relationships
In addition to its relationship with Microsoft, the Company has strategic
relationships with IBM, Compaq, Hewlett Packard and others. The Company depends
upon its strategic partners to successfully incorporate the Company's technology
into their products and to market and sell such products. If the Company is
unable to maintain its current strategic relationships or develop additional
strategic relationships, or if any of its key strategic partners are
unsuccessful at incorporating the Company's technology into their products or
marketing or selling such products, the Company's business, operating results
and financial condition could be materially adversely affected.
Competition
The markets in which the Company competes are intensely competitive. Most
of its competitors and potential competitors, including Microsoft, have
significantly greater financial, technical, sales and marketing and other
resources than the Company. The announcement of the release and the actual
release of products competitive with the Company's existing and future product
lines, such as Windows Server Operating Systems and related enhancements, could
cause existing and potential customers of the Company to postpone or cancel
plans to license the Company's products. This would adversely impact the
Company's business, operating results and financial condition. Further, the
Company's ability to market ICA, MetaFrame and other future product offerings
may be affected by Microsoft's licensing and pricing scheme for client devices
implementing the Company's product offerings, which attach to Windows Server
Operating Systems.
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. 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. Finally, 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 any inability to do so could adversely
affect its business, results of operations and financial condition.
Dependence on Proprietary Technology
The Company relies primarily on a combination of copyright, trademark and
trade secret laws, as well as confidentiality procedures and contractual
provisions, to protect its proprietary rights. The Company's efforts to protect
its proprietary technology rights may not be successful. The loss of any
material trade secret, trademark, tradename, or copyright could have a material
adverse effect on the Company. 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 regarded as proprietary. A
significant portion of the
24