TeleNav 2011 Annual Report Download - page 29

Table of Contents
Network failures, disruptions or capacity constraints in our third party data center facilities or in our servers could affect the performance of
our LBS and harm our reputation and our revenue.
Our LBS are provided through a combination of our servers, which we house at third party data centers, the public Internet and the private
and wireless networks of our wireless carrier customers. Our operations rely to a significant degree on the efficient and uninterrupted operation
of the third party data centers we use. Our hosted data centers are currently located in third party facilities located in the San Francisco Bay Area.
We have recently added third party data center facilities in the Sacramento, California area to provide for disaster recovery and, which we
expect, in the long term, to accommodate the anticipated growth of our LBS. Depending on the growth rate in the number of our end users and
their usage of our services, if we do not timely complete and open additional data centers, we may experience capacity issues, which could lead
to service failures and disruptions. In addition, if we are unable to secure data center space with appropriate power, cooling and bandwidth
capacity, we may be unable to efficiently and effectively scale our business to manage the addition of new wireless carrier customers, increases
in the number of our end users or increases in data traffic.
Our data centers are potentially vulnerable to damage or interruption from a variety of sources, including fire, flood, earthquake, power
loss, telecommunications or computer systems failure, human error, terrorist acts or other events. We have not yet completed a comprehensive
business continuity plan and there can be no assurance that the measures implemented by us to date, or measures implemented by us in the
future, to manage risks related to network failures or disruptions in our data centers will be adequate, or that the redundancies built into our
servers will work as planned in the event of network failures or other disruptions. In particular, if we experienced damage or interruptions to our
data centers in the San Francisco Bay Area, or were unable to commence recovery operations in our new data center in Sacramento, California,
our ability to provide efficient and uninterrupted operation of our services would be significantly impaired.
We could also experience failures of our data centers or interruptions of our services, or other problems in connection with our operations,
as a result of:
Poor performance in or disruptions of our services could harm our reputation, delay market acceptance of our services and subject us to
liabilities. Our wireless carrier agreements require us to meet at least 99.9% operational uptime requirements, excluding scheduled maintenance
periods, or be subjected to penalties.
In addition, if our end user base continues to grow, additional strain will be placed on our technology systems and networks, which may
increase the risk of a network disruption. Any outage in a network or system, or other unanticipated problem that leads to an interruption or
disruption of our LBS, could have a material adverse effect on our operating results and financial condition.
If our LBS platform does not scale as anticipated, or we are unable to grow data center capacity as needed, our business will be harmed.
Despite frequent testing of the scalability of our LBS platform in a test environment, the ability of our LBS platform to scale to support a
substantial increase in the use of our services or number of users in an actual commercial environment is unproven. If our LBS platform does not
efficiently and effectively scale to support and manage a substantial increase in the use of our services or number of users while maintaining a
high level of performance, our business will be seriously harmed.
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• damage to or failure of our computer software or hardware or our connections and outsourced service arrangements with third
parties;
•
errors in the processing of data by our servers;
•
computer viruses or software defects;
•
physical or electronic break
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ins, sabotage, intentional acts of vandalism and similar events; or
•
errors by our employees or third party service providers.