Tucows 2013 Annual Report Download - page 26

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the unwillingness of companies and consumers to shift their purchasing from traditional vendors to online vendors;
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the Internet infrastructure may not be able to support the demands placed on it, and its performance and reliability
may decline as usage grows;
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security and authentication issues may create concerns with respect to the transmission over the Internet of
confidential information; and
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privacy concerns, including those related to the ability of websites to gather user information without the user’s
knowledge or consent, may impact consumers’ willingness to interact online.
Any of these issues could slow the growth of the Internet, which could limit our growth and revenues.
We believe that part of our growth will be derived from resellers in international markets and may suffer if Internet usage
does not continue to grow globally.
We believe that a major source of growth for Internet-based companies will come from individuals and businesses
outside the United States where Internet access and use is currently less prevalent. A substantial number of our resellers are
currently based outside the United States and we plan to grow our business in other countries. If Internet usage in these
jurisdictions does not increase as anticipated, our revenues may not grow as anticipated.
We may be unable to respond to the rapid technological changes in the industry, and our attempts to respond may require
significant capital expenditures.
The Internet and electronic commerce are characterized by rapid technological change. Sudden changes in user and
customer requirements and preferences, the frequent introduction of new applications and services embodying new
technologies and the emergence of new industry standards and practices could make our applications, services and systems
obsolete. The emerging nature of applications and services in the Internet application and services industry and their rapid
evolution will require that we continually improve the performance, features and reliability of our applications and services.
Our success will depend, in part, on our ability:
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to develop and license new applications, services and technologies that address the increasingly sophisticated and
varied needs of our current and prospective customers; and
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to respond to technological advances and emerging industry standards and practices on a cost-effective and timely
basis.
The development of applications and services and other proprietary technology involves significant technological
and business risks and requires substantial expenditures and lead-time. We may be unable to use new technologies effectively
or adapt our internally developed technology and transaction- processing systems to customer requirements or emerging
industry standards in a timely manner, or at all. Our internal development teams may also be unable to keep pace with new
technological developments that affect the marketplace for our services. In addition, as we offer new services and
functionality, we will need to ensure that any new services and functionality are well integrated with our current services,
particularly as we offer an increasing number of our services as part of bundled suites. To the extent that any new services
offered by us do not interoperate well with our existing services, our ability to market and sell those new services would be
adversely affected and our revenue level and ability to achieve and sustain profitability might be harmed. Updating
technology internally and licensing new technology from third parties may require us to incur significant additional capital
expenditures.
We could experience system failures and capacity constraints which could diminish our ability to effectively provide our
services and could damage our reputation and harm our operating results.
The availability of our services depends on the continuing operation of our information technology and
communications systems. Any damage to or failure of our systems could result in interruptions in our service, which could
reduce our revenues and profits, and damage our brand. Our systems are vulnerable to damage or interruption from
earthquakes, terrorist attacks, floods, fires, power loss, telecommunications failures, computer viruses, computer denial of
service attacks or other attempts to harm our systems. Some of our data centers are located in areas with a high risk of major
earthquakes. Our data centers are also subject to break-ins, sabotage and intentional acts of vandalism, and to potential