Vistaprint 2010 Annual Report Download - page 15

Form 10-K
image components of our web pages are separated, translated and stored in our managed content
database. If a piece of content is reused, the desired content automatically appears in its correct
language on all websites, enabling our localized websites, regardless of the language or country
specific content, to share a single set of web pages that automatically use the appropriate content,
significantly reducing our software installation, deployment and maintenance costs.
Technology Development
We intend to continue developing and enhancing our proprietary and licensed software
programs and our manufacturing processes. As of June 30, 2010, more than 300 of our employees
were engaged in technology development. Our technology and development expenses were
$78.4 million, $60.9 million, and $44.8 million in the years ended June 30, 2010, 2009, and 2008,
respectively.
We have designed our website technologies and infrastructure to scale to accommodate future
growth in the number of customer visits, orders, and product and service offerings. This Internet-
based architecture makes our applications highly scalable and offers our customers fast system
responsiveness when editing document designs. Our production technologies for aggregating jobs in
preparation for manufacturing are designed to readily scale as we grow. The more individual jobs
received in a time period, the more efficiently aggregations, or gangs, of similar jobs can be
assembled and moved to the printing system, thereby maximizing the efficient use of the production
equipment and increasing overall system throughput.
Our customer-facing systems infrastructure, web and database servers are hosted in Bermuda
and we maintain data centers for backend server operations in our Dutch and Canadian facilities. Our
site systems are operated 24 hours a day, seven days a week. We believe our IT solution is highly
scalable, requiring only the addition of relatively inexpensive servers and processors.
Security is provided at multiple levels in both our hardware and software. We use 128-bit
encryption technology for secure transmission of confidential personal information between customers
and our web servers. All customer data is held behind firewalls. In addition, customer credit card
information is encrypted. We use fraud prevention technology to identify potentially fraudulent
transactions.
Our Mass Customization Manufacturing and Delivery Process
Our high-volume, standardized, scalable production processes are driven by sophisticated
proprietary software described above. Our technologies are designed to readily scale as the number
of print orders received per day increases. As more individual print jobs are received, similar jobs can
be aggregated and moved to the printing system more efficiently, thereby optimizing the use of the
printing equipment and increasing overall system throughput. Our proprietary workflow and production
management software allows us to deliver final products to customers in as few as three days. We
believe that our strategy of seeking to automate and systematize our service and production systems
enables us to reach and serve small-scale customers more effectively than our competitors.
With the improvements we have made in automating the design and production process, we
can produce and ship an order the same day we send it to production, which results in minimal
inventory levels and reduced working capital requirements. We can also produce complementary
custom products in a timely fashion, allowing us to produce and deliver multi-part orders quickly and
efficiently. This allows us to produce high-quality, low-priced products at high margins even though our
average order values are low by traditional standards.
As orders are received, we automatically route production jobs, often aggregated by our
VistaBridge technology, to the type and location of production system that is most appropriate and
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