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Table of Contents
Cost of Services Revenues
Our cost of services revenues primarily include the costs of personnel and related overhead to deliver technical support for our products and to provide
our professional services.
Cost of services revenues increased in 2013 compared to 2012 primarily due to an increase of $39 in employee-related expenses and an increase of $27
in costs we incur to provide technical support. These increases were generally proportional to the increases in services revenues for the same comparable
period. Equipment and depreciation costs also contributed to the increase in cost of services revenues. The increases were partially offset by a decrease of $32
of operating expenses related to Pivotal.
Cost of services revenues increased in 2012 compared to 2011 primarily due to an increase of $61 in employee-related expenses and travel and
entertainment expenses as well as an increase of $17 in costs we incur to provide technical support. Stock-based compensation expense also contributed to
the increase in cost of services revenues. These increases were partially offset by a decrease in IT development costs and the positive impact of foreign
exchange rate fluctuations.
Research and Development Expenses
Our research and development (“R&D”) expenses include the personnel and related overhead associated with the R&D of new product offerings and the
enhancement of our existing software offerings.
R&D expenses increased in 2013 compared to 2012 primarily due to growth in employee-related expenses of $85, which was primarily driven by
planned incremental growth in headcount. Additionally, contractor costs, stock-based compensation expense and equipment and depreciation expenses also
increased by $48 during 2013 compared to the prior year. The increases in expenses were partially offset by a decrease of $59 of research and development
expenses related to Pivotal.
R&D expenses increased in 2012 compared to 2011 primarily due to growth in employee-related expenses of $105, which were primarily driven by
planned incremental growth in headcount from hiring and business acquisitions. A decrease of $74 in capitalization of software expenses and an increase of
$36 in stock-based compensation expense further contributed to the increase in R&D. Additionally, the positive impact of foreign rate fluctuations partially
offset the increases in 2012.
45
For the Year Ended December 31,
2013 vs. 2012
2012 vs. 2011
2013
2012
2011
$ Change
% Change
$ Change
% Change
Cost of services revenues
$
491
$
456
$
392
$
35
8
%
$
65
17
%
Stock-based compensation
29
28
23
1
4
5
21
Total expenses
$
520
$
484
$
415
$
36
7
$
70
17
% of Total revenues
10
%
11
%
11
%
For the Year Ended December 31,
2013 vs. 2012
2012 vs. 2011
2013
2012
2011
$ Change
% Change
$ Change
% Change
Research and development
$
855
$
789
$
601
$
66
8
%
$
188
31
%
Stock-based compensation
227
210
174
17
8
36
21
Total expenses
$
1,082
$
999
$
775
$
82
8
$
224
29
% of Total revenues
21
%
22
%
21
%