Citrix 2000 Annual Report Download - page 27

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Company's sales are derived from the licensing of its packaged products under
"shrink wrap" license agreements that are not signed by licensees and electronic
licensing agreements that may be unenforceable under the laws of certain foreign
jurisdictions. In addition, the Company's ability to protect its proprietary
rights may be affected by the following:
− Differences in International Law. The laws of some foreign countries do
not protect the Company's intellectual property to the same extent as do
the laws of the United States and Canada.
− Third Party Infringement Claims. Third parties may assert infringement
claims against the Company in the future. This may result in costly
litigation or require the Company to obtain a license to intellectual
property rights of such third parties. Such licenses may not be available
on reasonable terms or at all.
Product Concentration
The Company anticipates that its MetaFrame product line and related
enhancements will constitute the majority of its revenue for the foreseeable
future. The Company's ability to generate revenue from its MetaFrame product
will depend upon market acceptance of Windows Server Operating Systems and/or
UNIX Operating Systems. Declines in demand for products based on MetaFrame
technology may occur as a result of new competitive product releases, price
competition, new products or updates to existing products, lack of success of
the Company's strategic partners, technological change or other factors.
Dependence on Key Personnel
The Company's success will depend, in large part, upon the services of a
number of key employees. The Company does not have long−term employment
agreements with any of its key personnel. Any officer or employee can terminate
his or her relationship at any time.
The effective management of the Company's anticipated growth will depend,
in a large part, upon the Company's ability to (i) retain its highly skilled
technical, managerial and marketing personnel; and (ii) to attract and maintain
replacements for and additions to such personnel in the future. Competition for
such personnel is intense and may affect the Company's ability to successfully
attract, assimilate or retain sufficiently qualified personnel.
New Products and Technological Change
The markets for the Company's products are relatively new and are
characterized by:
− rapid technological change;
− evolving industry standards;
− changes in end−user requirements; and
− frequent new product introductions and enhancements
These market characteristics will require the Company to continually
enhance its current products and develop and introduce new products to keep pace
with technological developments and respond to evolving end−user requirements.
Additionally, the Company and others may announce new product enhancements or
technologies that could replace or shorten the life cycle of the Company's
existing product offerings.
The Company believes it will incur additional costs and royalties
associated with the development, licensing or acquisition of new technologies or
enhancements to existing products. This will increase the Company's cost of
revenues and operating expenses. The Company cannot currently quantify such
increase with respect to transactions that have not occurred. The Company may
use a substantial portion of its cash and investments to fund these additional
costs.
The Company may need to hire additional personnel to develop new products,
product enhancements and technologies and to fulfill the Company's
responsibilities under the terms of the Development Agreement. If
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