Support.com 2008 Annual Report Download - page 19

Download and view the complete annual report

Please find page 19 of the 2008 Support.com annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

Table of Contents
adjustments of our guidance or the failure to meet our guidance or the expectations of research analysts would likely cause the market price of our common stock
to decline.
Our guidance is based in part upon the expectation of sales of services offerings in our Consumer business, with which we have a limited history. A
significant portion of our Consumer business is dependent upon third-party alliances, including an alliance with Office Depot. We sell to numerous consumers
through these channel partners, and these programs often require a significant initial investment of resources, strategic focus, and time before generating
revenue. Accordingly, the timing of the rollout of our services by each channel partner, and therefore the timing of our revenue associated with that channel
partner, is difficult to predict. Delay in the launch or rollout of our support services program in even one of these alliances could cause us to miss revenue targets,
particularly in the near term, since we depend on only a few alliances for most of our Consumer revenue. In addition, in the event we fail to achieve projected
revenue levels in any quarter, we will be unable to reduce our expenses for that quarter in a corresponding fashion, and our results will not meet our guidance or
the expectations of securities analysts or investors, which would likely cause the market price of our common stock to decline.
Management’s ability to accurately predict performance is also affected in large part by a significant portion of our total revenue being dependent upon the
closing of new large license orders in our Enterprise business.
The trading market for our common stock relies in part on the research and reports that industry or financial analysts publish about us or our business. We
do not control these analysts. If one or more of the analysts who currently cover us downgrade our stock, our stock price would likely decline rapidly.
Furthermore, if one or more of these analysts cease coverage of us, we could lose visibility in the market, which in turn could cause the market price of our stock
to decline.
Finally, the market prices of software companies have been extremely volatile. Stock prices of many software companies have often fluctuated in a manner
unrelated or disproportionate to the operating performance of such companies. In the past, following periods of market volatility, stockholders have often
instituted securities class action litigation relating to the stock trading and price volatility of the software company in question, including the litigation that
SupportSoft is a party to referred to under Item 3—Legal Proceedings. Any securities litigation we are involved in could result in our incurring substantial
defense costs and diverting resources and the attention of management from our business.
If we fail to hire, train and manage our Consumer technical support agents efficiently and in a manner that provides an adequate level of support for
our customers, our reputation and revenues could be harmed.
Our plans for our Consumer business depend in part on our ability to attract, manage and retain our consumer technical support agents in North America in
order to satisfy the demand for our Consumer services. We may be unable to hire, train and manage adequate numbers of competent technical support agents,
which is essential in creating a favorable interactive customer experience, including reducing customer wait times, reducing the time it takes our technical
support agents to deliver our services, and meeting customer demand for our services at peak time. We have limited experience in hiring, training, and managing
these technical support agents. Although our service delivery and communications infrastructure enables us to monitor and manage these technical support agents
remotely, because they are home-based and geographically dispersed, it is more difficult to directly supervise their work. Any problems we encounter retaining
technical support agents could seriously jeopardize our service delivery operations and our Consumer revenue. If we are unable to continually provide adequate
staffing for our service delivery operations, our revenue and reputation could be seriously harmed.
From time to time, we enter into relationships with outsourcers to provide technical support services to customers located outside North America and to
provide on-site services for certain North American customers. We may be less able to manage the quality of services provided by outsourced technical support
agents or
16
Source: SUPPORTSOFT INC, 10-K, March 11, 2009