Seagate 2014 Annual Report Download - page 24

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TableofContents
lowerpriced,lowcapacitydiskdrives.Thesefactorscoulddecreaseoursales,especiallywhencombinedwithcontinuedpriceerosion,whichcouldadversely
affectourresultsofoperations.
Wemaynotbesuccessfulinoureffortstogrowourcloudsystemsandsolutionsbusiness.
Wehavemadeandarecontinuingtomakeinvestmentstoexpandanddevelopourcloudsystemsandsolutionsbusiness.Ourcloudsystemsandsolutions
businessissubjecttothefollowingrisks:
•thecloudsystemsandsolutionsmarketmaydevelopmoreslowlythanweexpect;
•wemaynotbeabletooffercompellingsolutionstoenterprisesandconsumers;
•ourcloudsystemsandsolutionsbusinessgenerallyhasalongandunpredictablesalescycle,andgrowthinthisbusinessislikelytodependon
relativelylargecustomerorders,whichmayincreasethevariabilityofourresultsofoperationsandthedifficultyofmatchingrevenueswith
expenses.
Ourresultsofoperationsandsharepricemaybeadverselyaffectedifwearenotsuccessfulinoureffortstogrowourcloudcomputingbusinessasanticipated.
Inaddition,ourgrowthinthissectormaybringusintoclosercompetitionwithsomeofourcustomersorpotentialcustomers,whichmaydecreasetheirwillingness
todobusinesswithus.
Changesinthemacroeconomicenvironmenthavenegativelyimpacted,andmaycontinueto,negativelyimpactourresultsofoperations.
Duetothecontinuinguncertaintyaboutcurrentmacroeconomicconditionsaffectingconsumerandenterprisespending,webelieveourcustomersmay
postponespendinginresponsetotightercredit,unemployment,negativefinancialnewsand/ordeclinesinincomeorassetvalues,whichcouldhaveamaterial
adverseeffectonthedemandforourproducts.Continuinghighunemploymentrates,lowlevelsofconsumerliquidity,riskofdefaultonsovereigndebtand
volatilityincreditandequitymarketshaveweakenedconsumerconfidenceanddecreasedconsumerandenterprisespendinginmanyregionsaroundtheworld.
Otherfactorsthatcouldinfluencedemandincludeconditionsintheresidentialrealestateandmortgagemarkets,laborandhealthcarecosts,accesstocredit,
consumerconfidenceandothermacroeconomicfactorsaffectingconsumerspendingbehavior.Theseandothereconomicfactorscouldhaveamaterialadverse
effectondemandforourproductsandonourfinancialconditionandoperatingresults.
Ifwedonotcontrolouroperatingexpenses,wewillnotbeabletocompeteeffectivelyinourindustry.
Wecontinuallyseektomakeourcoststructureandbusinessprocessesmoreefficient.Wearefocusedonincreasingworkforceflexibilityandscalability,and
improvingoverallcompetitivenessbyleveragingourglobalcapabilities,aswellasexternaltalentandskills,worldwide.Ourstrategyinvolves,toasubstantial
degree,increasingrevenueandproductvolumewhileatthesametimecontrollingoperatingexpenses.Ifwedonotcontrolouroperatingexpenses,ourabilityto
competeinthemarketplacemaybeimpaired.Inthepast,activitiestoreduceoperatingcostshaveincludedclosuresandtransfersoffacilities,significantpersonnel
reductionsandeffortstoincreaseautomation.Thereductionofpersonnelandclosureoffacilitiesmayadverselyaffectourabilitytomanufactureourproductsin
requiredvolumestomeetcustomerdemandandmayresultinotherdisruptionsthataffectourproductsandcustomerservice.Oureffortstomakeouroperations
moreefficientmayresultinrestructuringandothercharges.
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