Computer Associates 2012 Annual Report Download - page 23

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 either diminish demand for or inhibit growth of 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. Furthermore, our business strategy is predicated upon our ability to develop and acquire products and
services that address customer needs and are accepted by the market better than those of our competitors.
We also face competition from numerous smaller companies that specialize in specific aspects of the highly fragmented software
industry, and from 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, certain 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 could result in price reductions or displacement of our products, which could materially adversely affect
our business, financial condition, operating results and cash flow.
Our competitors include large vendors of hardware and operating system software and 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 products rather than purchase our products. In addition, the software industry is
currently undergoing consolidation as software companies seek to offer more extensive suites and broader arrays of software products
and services, as well as integrated software and hardware solutions. This consolidation may adversely affect our competitive position,
which could materially adversely affect our business, financial condition, operating results and cash flow. Refer to Part I, Item 1,
“Business — (c) Narrative Description of the Business — Competition,” for additional information.
Failure to expand our partner programs related to the sale of our solutions may result in lost sales opportunities,
increases in expenses and a weakening in our competitive position.
We sell our solutions through global systems integrators, technology partners, managed service providers, solution providers,
distributors of volume partners and exclusive representatives in partner programs that require training and expertise to sell these
solutions, and global penetration to grow these aspects of our business. The failure to expand these partner programs and penetrate
these markets could materially adversely affect our success with partners, resulting in lost sales opportunities and an increase in
expenses, and could also weaken our competitive position.
Our business may suffer if we are not able to retain and attract adequate qualified personnel, including key
managerial, technical, marketing and sales personnel.
We operate in a business where there is intense competition for experienced personnel in all of our global markets. We depend on our
ability to identify, recruit, hire, train, develop and retain qualified and effective personnel and to attract and retain talent needed to
execute our business strategy. Our ability to do so depends on numerous factors, including factors that we cannot control, such as
competition and conditions in the local employment markets in which we operate. Our future success depends in a large part on the
continued contribution of our senior management and other key employees. A loss of a significant number of skilled managerial,
technical, marketing or other personnel could have a negative effect on the quality of our products. A loss of a significant number of
experienced and effective sales personnel could result in fewer sales of our products. Our failure to retain qualified employees in
these categories could materially adversely affect our business, financial condition, operating results and cash flow.
We may encounter difficulties in successfully integrating companies and products that we have acquired or may
acquire into our existing business, which could materially adversely affect our infrastructure, market presence,
business, financial condition, operating results and cash flow.
In the past we have acquired, and in the future we expect to acquire, complementary companies, products, services and technologies
(including through mergers, asset acquisitions, joint ventures, partnerships, strategic alliances and equity investments). Additionally,
we expect to acquire technology and software that are consistent with our business strategy. The risks we may encounter include:
•We may find that the acquired company or assets do not improve our financial and strategic position as planned;
•We may have difficulty integrating the operations, facilities, personnel and commission plans of the acquired business;
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