Computer Associates 2008 Annual Report Download - page 22

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•We may have difficulty integrating the operations, facilities, personnel and commission plans of the acquired
business;
•We may have difficulty forecasting or reporting results subsequent to acquisitions;
•We may have difficulty retaining the technical skills needed to provide services on the acquired products;
•We may have difficulty incorporating the acquired technologies or products with our existing product lines;
•We may have product liability, customer liability or intellectual property liability associated with the sale of the
acquired company’s products;
•Our ongoing business may be disrupted by transition or integration issues; our management’s attention may be
diverted from other business concerns;
•We may be unable to obtain timely approvals from governmental authorities under applicable competition and
antitrust laws;
•We may have difficulty maintaining uniform standards, controls, procedures and policies;
•Our relationships with current and new employees, customers and distributors could be impaired; the acquisition
may result in increased litigation risk, including litigation from terminated employees or third parties;
•We may have difficulty with determinations related to accounting matters, including those that require a high degree
of judgment or complex estimation processes, including valuation and accounting for goodwill and intangible assets,
stock-based compensation, and income tax matters; and
•Our due diligence process may fail to identify significant issues with the target company’s product quality, financial
disclosures, accounting practices, internal control deficiencies, including material weaknesses, product architecture,
legal contingencies and other matters.
These factors could have a material adverse effect on our business, results of operations, financial condition and cash
flow, particularly in the case of a large acquisition or number of acquisitions. To the extent we issue shares of stock or
other rights to purchase stock, including options, to pay for acquisitions or to retain employees, existing stockholders’
interests may be diluted and earnings per share may decrease.
We are subject to intense competition in product and service offerings and pricing, and we expect to face increased
competition in the future, which could diminish demand for our products and, therefore, reduce our sales, revenue and
market presence.
The markets for our products are intensely competitive, and we expect product and service offerings and pricing
competition to increase. Some of our competitors have longer operating histories, greater name recognition, a larger
installed base of customers in any particular market niche, larger technical staffs, established relationships with
hardware vendors or greater financial, technical and marketing resources. Competitors for our various products include
large technology companies. We also face competition from numerous smaller companies that specialize in specific
aspects of the highly fragmented software industry and shareware authors that may develop competing products. In
addition, new companies enter the market on a frequent and regular basis, offering products that compete with those
offered by us. Moreover, many customers historically have developed their own products that compete with those
offered by us. The competition may affect our ability to attract and retain the technical skills needed to provide services
to our customers, forcing us to become more reliant on delivery of services through third parties. This, in turn, could
increase operating costs and decrease our revenue, profitability and cash flow. Additionally, competition from any of
these sources can result in price reductions or displacement of our products, which could have a material adverse effect
on our business, financial condition, operating results and cash flow.
Our competitors include large vendors of hardware or operating system software and/or service providers. The
widespread inclusion of products that perform the same or similar functions as our products bundled within computer
hardware or other companies’ software products, or services similar to those provided by us, could reduce the perceived
need for our products and services, or render our products obsolete and unmarketable. Furthermore, even if these
incorporated products are inferior or more limited than our products, customers may elect to accept the incorporated
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