VMware 2007 Annual Report Download - page 22

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Table of Contents
party solutions embodying new technologies and the emergence of new industry standards could make our existing and future software solutions
obsolete and unmarketable. We may not be able to develop updated products that keep pace with technological developments and emerging
industry standards and that address the increasingly sophisticated needs of our customers or that interoperate with new or updated operating
systems and hardware devices or certify our products to work with these systems and devices. There is no assurance that any of our new
offerings would be accepted in the marketplace. Significant reductions in server-related costs or the rise of more efficient infrastructure
management software could also affect demand for our software solutions. As hardware and processors become more powerful, we will have to
adapt our product and service offerings to take advantage of the increased capabilities. For example, while the introduction of more powerful
servers presents an opportunity for us to provide better products for our customers, the expected migration of servers from dual-core to quad-
core microprocessor technology will also allow an end user with a given number of licensed copies of our software to double the number of
virtualization machines run per server socket without having to purchase additional licenses from us. As a result, we may not be able to
accurately predict the lifecycle of our software solutions, and they may become obsolete before we receive the amount of revenues that we
anticipate from them. If any of the foregoing events were to occur, our ability to retain or increase market share and revenues in the virtualization
software market could be materially adversely affected.
Our success depends upon our ability to develop new products and services, integrate acquired products and services and enhance our
existing products and services.
If we are unable to develop new products and services, or to enhance and improve our products and support services in a timely manner or
to position and/or price our products and services to meet market demand, customers may not buy new software licenses or renew software
license updates and product support. In addition, information technology standards from both consortia and formal standards-setting forums as
well as de facto marketplace standards are rapidly evolving. We cannot provide any assurance that the standards on which we choose to develop
new products will allow us to compete effectively for business opportunities in emerging areas.
New product development and introduction involves a significant commitment of time and resources and is subject to a number of risks
and challenges including:
In addition, if we cannot adapt our business models to keep pace with industry trends, our revenue could be negatively impacted.
Our ability to sell our products is dependent on the quality of our support and services offerings, and our failure to offer high-
quality support
and services could have a material adverse effect on our sales and results of operations.
Once our products are integrated within our customers’ hardware and software systems, our customers may depend on our support
organization to resolve any issues relating to our products. A high level of support is critical for the successful marketing and sale of our
products. If we or our channel partners do not effectively assist our customers in deploying our products, succeed in helping our customers
quickly resolve post-deployment issues, and provide effective ongoing support, our ability to sell our products to existing customers
18
•
Managing the length of the development cycle for new products and product enhancements, which has frequently been longer than
we originally expected;
•
Adapting to emerging and evolving industry standards and to technological developments by our competitors and customers;
•
Entering into new or unproven markets with which we have limited experience;
•
Incorporating and integrating acquired products and technologies; and
•
Developing or expanding efficient sales channels.