Citrix 2007 Annual Report Download - page 23

We believe that we could incur additional costs and royalties as we develop, license or buy new
technologies or enhancements to our existing products. These added costs and royalties could increase our cost of
revenues and operating expenses. However, we cannot currently quantify the costs for such transactions that have
not yet occurred. In addition, we may need to use a substantial portion of our cash and investments to fund these
additional costs.
Our business could be adversely impacted by a failure to renew our agreements with Microsoft for source code
access.
In December 2004, we entered into a five-year technology collaboration and licensing agreement with
Microsoft Corporation and in September 2007, we entered into a three-year source code license with Microsoft
for the general release version of Windows Server 2008. These arrangements include a technology initiative for
closer collaboration on terminal server functionality in future server operating systems, continued access to
source code for key components of Microsoft’s current server operating systems, and a patent cross-licensing
agreement. There can be no assurances that our current licenses with Microsoft will be extended or renewed by
Microsoft after their respective expirations. In addition, Microsoft could terminate the current licenses before the
expiration of the term for breach or upon a change of control. The early termination or the failure to renew
certain of our current licenses with Microsoft in a manner favorable to us could negatively impact the timing of
our release of future products and enhancements.
If we lose key personnel or cannot hire enough qualified employees, our ability to manage our business could
be adversely affected.
Our success depends, in large part, upon the services of a number of key employees. Except for certain key
employees of acquired businesses, we do not have long-term employment agreements with any of our key
personnel. Any officer or employee can terminate his or her relationship with us at any time. The effective
management of our growth, if any, could depend upon our ability to retain our highly-skilled technical, sales and
services managerial, finance and marketing personnel. If any of those employees leave, we will need to attract and
retain replacements for them. We also need to add key personnel in the future. The market for these qualified
employees is competitive. We could find it difficult to successfully attract, assimilate or retain sufficiently qualified
personnel in sufficient numbers. Furthermore, we may hire key personnel in connection with our future acquisitions;
however, any of these employees will be able to terminate his or her relationship with us at any time. If we cannot
retain and add the necessary staff and resources for these acquired businesses, our ability to develop acquired
products, markets and customers could be adversely affected. Also, we may need to hire additional personnel to
develop new products, product enhancements and technologies. If we cannot add the necessary staff and resources,
our ability to develop future enhancements and features to our existing or future products could be delayed. Any
delays could have a material adverse effect on our business, results of operations and financial condition.
If we fail to manage our operations and grow revenue or fail to continue to effectively control expenses, our
future operating results could be adversely affected.
Historically, the scope of our operations, the number of our employees and the geographic area of our
operations and our revenue have grown rapidly. In addition, we have acquired both domestic and international
companies. This growth and the assimilation of acquired operations and their employees could continue to place
a significant strain on our managerial, operational and financial resources. To manage our current growth and any
future growth effectively, we need to continue to implement and improve additional management and financial
systems and controls. We may not be able to manage the current scope of our operations or future growth
effectively and still exploit market opportunities for our products and services in a timely and cost-effective way.
Our future operating results could also depend on our ability to manage:
• our expanding product lines;
• our marketing and sales organizations; and
• our client support organization as installations of our products increase.
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