Computer Associates 2012 Annual Report Download - page 25

In addition, the emergence of cloud computing means that many of our enterprise solutions customers are themselves undergoing a
radical shift in the way they deliver IT services to their businesses. The shift towards delivering infrastructure and
Software-as-a-Service (SaaS) from the cloud may negatively affect our ability to sell IT management solutions to our traditional
enterprise solutions customers. While we believe we adequately understand this risk and are taking steps in our product and business
strategy to plan for it, failure to adapt our products, solutions, delivery models and sales approaches to effectively plan for cloud
computing may adversely affect our business. If we are not successful in anticipating the rate of market change towards the cloud
computing paradigm and evolving with it by delivering solutions for IT management in the cloud computing environment, customers
may forgo the use of our products in favor of those with comparable functionality delivered via the cloud, which could materially
adversely affect our business, financial condition, operating results and cash flow.
Our customers’ data centers and IT environments may be subject to hacking or other cybersecurity threats,
harming customer relationships and the market perception of the effectiveness of our products.
An actual or perceived breach of our customers’ network security allowing access to our customers’ data centers or other parts of
their IT environments, including access to confidential and personally identifiable information maintained by a customer, regardless
of whether the breach is attributable to our products, may cause contractual disputes and may negatively affect the market perception
of the effectiveness of our products and our reputation. Because the techniques used by computer hackers to access or sabotage
networks change frequently and may not be recognized until launched against a target, we may be unable to anticipate these
techniques. Alleviating any of these problems could require significant expenditures of our capital and diversion of our resources
from development efforts. Additionally, these efforts could cause interruptions, delays or cessation of our product licensing, or
modification of our software, which could cause us to lose existing or potential customers, and/or subject us to legal action by
government authorities or private parties, which could materially adversely affect our business, financial condition, operating results
and cash flow.
Our software products, data centers and IT environments may be subject to hacking or other cybersecurity
threats, resulting in a loss or misuse of proprietary, personally identifiable and confidential information and
harm to the market perception of the effectiveness of our products.
Given that our products are intended to manage and secure IT infrastructures and environments, we expect to be an ongoing target of
attacks specifically designed to impede the performance of our products. Similarly, experienced computer programmers or hackers
may attempt to penetrate our network security or the security of our data centers and IT environments. These hackers, or others,
which may include our employees or vendors, may misappropriate proprietary, personally identifiable and confidential information of
the Company, our customers, our employees or our business partners or other individuals or cause interruptions of our services.
Although we continually seek to improve our countermeasures to prevent and detect such incidents, if these efforts are not successful,
our business operations, and those of our customers, could be adversely affected, losses or theft of data could occur, our reputation
and future sales could be harmed, governmental regulatory action or litigation could be commenced against us and our business,
financial condition, operating results and cash flow could be materially adversely affected.
Discovery of errors in our software could materially adversely affect our revenue and earnings and subject us to
costly and time consuming product liability claims.
The software products we offer are inherently complex. Despite testing and quality control, we cannot be certain that errors will not
be found in current versions, new versions or enhancements of our products after commencement of commercial shipments. If new or
existing customers have difficulty deploying our products or require significant amounts of customer support, our operating margins
could be adversely affected. We could also face possible claims and higher development costs if our software contains errors that we
have not detected or if our software otherwise fails to meet our customers’ expectations. Significant technical challenges also arise
with our products because our customers license and deploy our products across a variety of computer platforms and integrate them
with a number of third-party software applications and databases. These combinations increase our risk further because, in the event
of a system-wide failure, it may be difficult to determine which product is at fault. As a result, we may be harmed by the failure of
another supplier’s products. As a result of the foregoing, we could experience:
•Loss of or delay in revenue and loss of market share;
•Loss of customers, including the inability to obtain repeat business with existing key customers;
•Damage to our reputation;
•Failure to achieve market acceptance;
•Diversion of development resources;
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