VMware 2009 Annual Report Download - page 23

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Table of Contents
Our use of “open source” software could negatively affect our ability to sell our products and subject us to possible litigation.
A significant portion of the products or technologies acquired, licensed or developed by us may incorporate so-called “open source”
software, and we may incorporate open source software into other products in the future. Additionally, open source technology underlies the
offerings of SpringSource, a company we acquired in 2009. Such open source software is generally licensed by its authors or other third parties
under open source licenses, including, for example, the GNU General Public License, the GNU Lesser General Public License, “Apache-style”
licenses, “BSD-style” licenses and other open source licenses. We monitor our use of open source software in an effort to avoid subjecting our
products to conditions we do not intend. Although we believe that we have complied with our obligations under the various applicable licenses
for open source software that we use, there is little or no legal precedent governing the interpretation of many of the terms of certain of these
licenses, and therefore the potential impact of these terms on our business is somewhat unknown and may result in unanticipated obligations
regarding our products and technologies. For example, we may be subjected to certain conditions, including requirements that we offer our
products that use the open source software for no cost, that we make available source code for modifications or derivative works we create based
upon incorporating, using or distributing the open source software and/or that we license such modifications or derivative works under the terms
of the particular open source license. Any of these obligations could have an adverse impact on our intellectual property rights and our ability to
derive revenue from products incorporating the open source software.
If an author or other third party that distributes such open source software were to allege that we had not complied with the conditions of
one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations. If our defenses were
not successful, we could be subject to significant damages, enjoined from the distribution of our products that contained the open source
software and required to comply with the foregoing conditions, which could disrupt the distribution and sale of some of our products. In
addition, if we combine our proprietary software with open source software in a certain manner, under some open source licenses we could be
required to release the source code of our proprietary software, which could substantially help our competitors develop products that are similar
to or better than ours.
In addition to risks related to license requirements, usage of open source software can lead to greater risks than use of third party
commercial software, as open source licensors generally do not provide warranties or assurance of title or controls on origin of the software. In
addition, many of the risks associated with usage of open source such as the lack of warranties or assurances of title, cannot be eliminated, and
could, if not properly addressed, negatively affect our business. We have established processes to help alleviate these risks, including a review
process for screening requests from our development organizations for the use of open source and conducting appropriate due diligence of the
use of open source in the products developed by companies we acquire, but we cannot be sure that all open source software is submitted for
approval prior to use in our products or is discovered during due diligence.
The product offerings from our recent acquisition, SpringSource, are based upon and incorporate open source software technologies that
subject us to additional risks and challenges which could result in increased development expenses, delays or disruptions to the release or
distribution of those software solutions, and increased competition.
In September 2009, we completed our acquisition of SpringSource, a software company that uses open source extensively in its software
solutions. Software solutions that are substantially or mostly based on open source software subject us to a number of risks and challenges:
20
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If open source software programmers, most of whom we do not employ, do not continue to develop and enhance open source
technologies, our development expenses could be increased and our product release and upgrade schedules could be delayed.
•
One of the characteristics of open source software is that anyone can modify the existing software or develop new software that
competes with existing open source software. As a result, competition can