Salesforce.com 2012 Annual Report Download - page 27

We may be required to spend significant resources to monitor and protect our intellectual property rights.
We may initiate claims or litigation against third parties for infringement of our proprietary rights or to establish
the validity of our proprietary rights. Any litigation, whether or not it is resolved in our favor, could result in
significant expense to us and divert the efforts of our technical and management personnel.
Privacy concerns and laws, evolving regulation of the Internet, cross-border data transfers and other
domestic or foreign regulations may limit the use and adoption of our solution and adversely affect our
business.
As Internet commerce continues to evolve, increasing regulation by federal, state or foreign governments
and agencies becomes more likely. For example, we believe increased regulation is occurring in the area of data
privacy, and laws and regulations applying to the solicitation, collection, processing or use of personal or
consumer information could affect our customers’ ability to use and share data, potentially reducing demand for
our solutions and restricting our ability to store, process and share data with our customers.
Our customers can use our service to store contact and other personal or identifying information regarding
their customers and contacts. Federal, state and foreign governments and agencies have adopted or are
considering adopting laws and regulations regarding the collection, use and disclosure of personal information
obtained from consumers and individuals in addition to laws and regulations that impact the cross-border transfer
of personal information. The costs of compliance with, and other burdens imposed by, such laws and regulations
that are applicable to the businesses of our customers may limit the use and adoption of our service and reduce
overall demand for it, or lead to significant fines, penalties or liabilities for any noncompliance with such privacy
laws. Furthermore, privacy concerns may cause our customers’ customers to resist providing the personal data
necessary to allow our customers to use our service effectively. Even the perception of privacy concerns, whether
or not valid, may inhibit market adoption of our service in certain industries.
In addition to government activity, privacy advocacy groups and the technology and other industries are
considering various new, additional or different self-regulatory standards that may place additional burdens on
us. If the gathering of personal information were to be curtailed in this manner, CRM solutions would be less
effective, which may reduce demand for our service and harm our business.
If we fail to develop and maintain our brands, our business may suffer.
We believe that developing and maintaining awareness of the salesforce.com brand and our other brands is
critical to achieving widespread acceptance of our existing and future services and is an important element in
attracting new customers. We have incurred and expect to continue to incur significant expense to build our
brands. Brand promotion activities may not yield increased revenue, and even if they do, any increased revenue
may not offset the expenses we incurred in building our brands. If we fail to successfully promote and maintain
our brands, or incur substantial expenses in an unsuccessful attempt to promote and maintain our brands, we may
fail to attract enough new customers or retain our existing customers to the extent necessary to realize a sufficient
return on our brand-building efforts, and our business could suffer.
We may lose key members of our management team or development and operations personnel, and may
be unable to attract and retain employees we need to support our operations and growth.
Our success depends substantially upon the continued services of our executive officers and other key
members of management, particularly our Chief Executive Officer. From time to time, there may be changes in
our executive management team resulting from the hiring or departure of executives. Such changes in our
executive management team may be disruptive to our business. We are also substantially dependent on the
continued service of our existing development and operations personnel because of the complexity of our service
and technologies. We do not have employment agreements with any of our executive officers, key management,
development or operations personnel and they could terminate their employment with us at any time. The loss of
one or more of our key employees or groups could seriously harm our business.
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