VMware 2013 Annual Report Download - page 13

Table of Contents
The information found on our website is not part of, and is not incorporated by reference into, this or any other report we file with, or furnish to, the SEC.
Unless the context requires otherwise, we are referring to VMware, Inc. when we use the terms “VMware,” the “Company,” “we,” “our” or “us.”
The risk factors that appear below could materially affect our business, financial condition and results of operations. The risks and uncertainties
described below are not the only risks and uncertainties facing us. Our business is also subject to general risks and uncertainties that affect many other
companies.
Risks Related to Our Business
As the market for our computer virtualization products has matured, we have been increasingly developing and marketing products and services targeted
toward the delivery, management and automation of information technology (“IT”) infrastructure, platforms and services through cloud-
based solutions.
If businesses do not find our cloud computing solutions compelling, our revenue growth and operating margins may decline.
Our products and services are based on computer virtualization and related technologies that have primarily been used for virtualizing on-premises data
centers. As the market for data center virtualization has matured, we have increasingly directed our product development and marketing toward products and
services that enable businesses to utilize virtualization as the foundation for cloud-based computing, management and automation of the delivery of IT
resources, end-user computing and Infrastructure as a service (“IaaS”) offerings including hybrid cloud services. Our success depends on organizations and
customers perceiving technological and operational benefits and cost savings associated with the increasing adoption of virtualization-based infrastructure
and management solutions for cloud computing, hybrid cloud services and end-user computing. As the market for our data center virtualization products
mature and the scale of our business increases, it may be difficult to maintain previous rates of growth in our product sales. In addition, to the extent that our
newer cloud computing infrastructure management and automation, or software-defined data center (“SDDC”), solutions, end-user computing, and hybrid
cloud solutions are adopted more slowly or less comprehensively than we expect, our revenue growth rates may slow materially or our revenue may decline
substantially.
The large majority of our revenues have come from our data center virtualization products including our flagship VMware vSphere product line.
Decreases in demand for our data center virtualization products could adversely affect our results of operations and financial condition.
The large majority of our revenues have come from our data center virtualization products. Although we continue to develop other applications for our
virtualization technology such as our end-user computing products and hybrid cloud services and expand our offerings into related areas, we expect that our
data center virtualization products and related enhancements and upgrades will constitute a majority of our revenue for the foreseeable future. Declines and
variability in demand for our data center virtualization products could occur as a result of:
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• webcasts of our quarterly earnings calls and links to webcasts of investor conferences at which our executives appear (archives of these events are
also available for a limited time);
• additional information on financial metrics, including reconciliations of non-GAAP financial measures discussed in our presentations to the nearest
comparable GAAP measure;
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press releases on quarterly earnings, product and service announcements, legal developments and international news;
• corporate governance information including our certificate of incorporation, bylaws, corporate governance guidelines, board committee charters,
business conduct guidelines (which constitutes our code of business conduct and ethics) and other governance-related policies;
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other news, blogs and announcements that we may post from time to time that investors might find useful or interesting; and
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opportunities to sign up for email alerts and RSS feeds to have information pushed in real time.
ITEM 1A.
RISK FACTORS
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improved products or product versions being offered by competitors in our markets;
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competitive pricing pressures;
• failure to timely execute and implement our product strategy, which could lead to quality issues, integration issues with ecosystem partners, and
difficulties in creating and marketing suites of interoperable solutions;
•
failure to release new or enhanced versions of our data center virtualization products on a timely basis, or at all;