EMC 2007 Annual Report Download - page 16

to compete against us. We compete on the basis of our products' features, performance and price as well as our services. Our failure to compete on any of
these bases could affect demand for our products or services, which could have a material adverse effect on our business, results of operations or financial
condition.
Companies may develop new technologies or products in advance of us or establish business models or technologies disruptive to us. Our business may
be materially adversely affected by the announcement or introduction of new products, including hardware and software products and services by our
competitors, and the implementation of effective marketing or sales strategies by our competitors. The material adverse effect to our business could include a
decrease in demand for our products and services and an increase in the length of our sales cycle due to customers taking longer to compare products and
services and to complete their purchases.
We may have difficulty managing operations.
Our future operating results will depend on our overall ability to manage operations, which includes, among other things:
retaining and hiring, as required, the appropriate number of qualified employees
managing, protecting and enhancing, as appropriate, our infrastructure, including but not limited to, our information systems and internal controls
accurately forecasting revenues
training our sales force to sell more software and services
successfully integrating new acquisitions
managing inventory levels, including minimizing excess and obsolete inventory, while maintaining sufficient inventory to meet customer
demands
controlling expenses
managing our manufacturing capacity, real estate facilities and other assets
executing on our plans
An unexpected decline in revenues without a corresponding and timely reduction in expenses or a failure to manage other aspects of our operations could
have a material adverse effect on our business, results of operations or financial condition.
Our investment portfolio could experience a decline in market value which could adversely affect our financial results.
We held $3.5 billion in short and long-term investments as of December 31, 2007. The investments are invested primarily in investment grade securities,
and we limit the amount of investment with any one issuer. A deterioration in the economy, including a credit crisis or significant volatility in interest rates,
could cause the investments to decline in value or could impact the liquidity of the portfolio. If market conditions deteriorate significantly, our results of
operations or financial condition could be materially adversely affected.
Our business could be materially adversely affected as a result of war or acts of terrorism.
Terrorist acts or acts of war may cause damage or disruption to our employees, facilities, customers, partners, suppliers, distributors and resellers, which
could have a material adverse effect on our business, results of operations or financial condition. Such conflicts may also cause damage or disruption to
transportation and communication systems and to our ability to manage logistics in such an environment, including receipt of components and distribution of
products.
Our business may suffer if we are unable to retain or attract key personnel.
Our business depends to a significant extent on the continued service of senior management and other key employees, the development of additional
management personnel and the hiring of new qualified employees. There can be no assurance that we will be successful in retaining existing personnel or
recruiting new personnel. The loss of one or more key or other employees, our inability to attract additional qualified employees or the delay in hiring key
personnel could have a material adverse effect on our business, results of operations or financial condition.
In addition, we have historically used stock options and other equity awards as key elements of our compensation packages for many of our employees.
As a result of the requirement to expense stock-based compensation, we have reduced and may further reduce the number of shares and type of equity awards
granted to employees. Additionally, the value of our equity awards may be adversely affected by the volatility of our stock price. Changes to regulatory or
stock exchange rules and regulations and in institutional shareholder voting guidelines on equity plans may result in additional requirements or limitations on
our equity plans. These factors may impair our ability to attract, retain and motivate employees.
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