1050808--3/31/2006--VITRIA_TECHNOLOGY

related topics

{product, market, service}

{property, intellectual, protect}

{customer, product, revenue}

{system, service, information}

{stock, price, operating}

{personnel, key, retain}

{acquisition, growth, future}

Our operating results are substantially dependent on license revenue from BusinessWare and our business could be materially harmed by factors that adversely affect the pricing and demand for BusinessWare. Failure to raise additional capital or generate the significant capital necessary to expand our operations and invest in new products could reduce our ability to compete and result in lower revenue. The reluctance of companies to make significant expenditures on information technology could reduce demand for our products and cause our revenue to decline. We experience long and variable sales cycles, which could have a negative impact on our results of operations for any given quarter. Because a small number of customers have in the past accounted for a substantial portion of our revenue, our revenue could decline due to the loss or delay of a single customer order. If we are not successful in developing industry specific pre-built process applications based on BusinessWare, our ability to increase future revenue could be harmed. Our products may not achieve market acceptance, which could cause our revenue to decline. Our markets are highly competitive and, if we do not compete effectively, we may suffer price reductions, reduced gross margins and loss of market share. The cost and difficulty in implementing our product could significantly harm our reputation with customers, diminishing our ability to license additional products to our customers. If our products do not operate with the many hardware and software platforms used by our customers, our business may fail. If we fail to introduce new versions and releases of our products in a timely manner, our revenue may decline. Our products rely on third-party programming tools and applications. If we lose access to these tools and applications, or are unable to modify our products in response to changes in these tools and applications, our revenue could decline. The use of Open Source Software in our products may expose us to additional risks and harm our intellectual property our intellectual property position. We could suffer losses and negative publicity if new versions and releases of our products contain errors or defects. If we fail to attract and retain qualified personnel, our ability to compete will be harmed. If we fail to adequately protect our proprietary rights, we may lose these rights and our business may be seriously harmed. Our products could infringe the intellectual property rights of others causing costly litigation and the loss of significant rights. Our significant international operations may fail to generate significant product revenue or contribute to our drive toward profitability, which could result in slower revenue growth and harm our business. We are at risk of securities class action litigation due to our expected stock price volatility.

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1050808--3/31/2006--VITRIA_TECHNOLOGY_INC