CompUSA 2007 Annual Report Download - page 51

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8
Industrial Products
The market for the sale of industrial products in North America is highly fragmented and is characterized
by multiple distribution channels such as retail outlets, small dealerships, direct mail distribution,
internet-based resellers and large warehouse stores. We also face competition from manufacturers' own
sales representatives, who sell industrial equipment directly to customers, and from regional or local
distributors. Many high volume purchasers, however, utilize catalog distributors as their first source of
product. In the industrial products market, customer purchasing decisions are primarily based on price,
product selection, product availability, level of service and convenience. We believe that direct
marketing via catalog, the internet and sales representatives is an effective and convenient distribution
method to reach mid-sized facilities that place many small orders and require a wide selection of
products. In addition, because the industrial products market is highly fragmented and generally less
brand oriented, it is well suited to private label products.
Hosted Software
Hosted Software offers an on-demand software solution for the multi-channel commerce industry. The
software distribution model in which a software application is hosted by a software vendor or a service
provider and made available to customers over the Internet is also known as software as a service (SaaS).
Leading technology analysts generally agree that traditional software licensing is being replaced with on-
demand delivery models that increase the predictability of information technology financial expenditures
while making it easier for multi-channel commerce companies to manage their customers, products and
services regardless of sales channel.
The increasing replacement of obsolete software solutions by multi-channel retailers for newer
technologies provides Hosted Software with a competitive edge which is likely to give rise to greater
deployments of its on-demand software. The advantages of having a single solution, single database to
manage all sales channels (eCommerce, call center, catalog, mail order, retail) with web-based
accessibility and faster implementation cycles will fuel continued penetration into the multi-channel
software market space.
Employees
As of December 31, 2007, we employed a total of 3,535 employees, including 3,140 full-time and 395
part-time employees, of whom 2,343 were in North America and 1,192 were in Europe.
Environmental Matters
Under various national, state and local environmental laws and regulations in North America and Europe,
a current or previous owner or operator (including the lessee) of real property may become liable for the
costs of removal or remediation of hazardous substances at such real property. Such laws and regulations
often impose liability without regard to fault. We lease most of our facilities. In connection with such
leases, we could be held liable for the costs of removal or remedial actions with respect to hazardous
substances. Although we have not been notified of, and are not otherwise aware of, any material real
property environmental liability, claim or non-compliance, there can be no assurance that we will not be
required to incur remediation or other costs in connection with real property environmental matters in the
future.