1253955--3/27/2008--COMPELLENT_TECHNOLOGIES

related topics

{product, market, service}

{system, service, information}

{stock, price, operating}

{customer, product, revenue}

{property, intellectual, protect}

{acquisition, growth, future}

{stock, price, share}

{provision, law, control}

{control, financial, internal}

{tax, income, asset}

{regulation, change, law}

{competitive, industry, competition}

{personnel, key, retain}

{operation, international, foreign}

Our quarterly operating results may fluctuate significantly, which makes our future results difficult to predict. The markets in which we compete are highly competitive and dominated by large corporations and we may not be able to compete effectively. Aggressive business tactics by our competitors may reduce our revenue. We are dependent on a single product, and the lack of continued market acceptance of Storage Center would result in lower revenue. Our products must meet exacting specifications, and defects and failures may occur, which may cause channel partners or end users to return or stop buying our products. We may not sustain our percentage growth rate, and we may not be able to manage any future growth effectively. Our gross margin may vary and such variation may make it more difficult to forecast our earnings. We receive a substantial portion of our revenue from a limited number of channel partners, and the loss of, or a significant reduction in, orders from one or more of our major channel partners would result in lower revenue. We may not be able to maintain existing channel partners or grow our business to include more channel partners and large enterprise end users. If our channel partners give higher priority to our competitors storage products we may be unable to grow our revenue and we may continue to incur net losses. The loss of any key suppliers or the failure to accurately forecast demand for our products or successfully manage our relationships with our key suppliers could negatively impact our ability to sell our products. If our third-party repair service fails to timely and correctly resolve hardware failures experienced by our end users, our reputation will suffer, our competitive position will be impaired and our expenses could increase. If we are unsuccessful in developing and selling new products, services and product enhancements, our competitive position will be adversely affected and our ability to grow our revenue will be impaired. If our channel partners fail to timely and correctly install and configure our storage systems, or face disruptions in their business, our reputation will suffer, our competitive position could be impaired and we could lose customers. As we enter new markets we may encounter longer sales, payment and implementation cycles, which could have an adverse effect on the size, timing and predictability of our revenue. If we fail to attract or retain engineering or sales and marketing personnel or if we lose the services of our founders or key management, our ability to grow our business and our competitive position would be impaired. We expect to face numerous challenges as we attempt to grow our operations, and our channel partner and end user base internationally. If we fail to protect our intellectual property rights adequately, our ability to compete effectively or to defend ourselves from litigation could be impaired which could reduce our revenue and increase our costs. Assertions by third parties of infringement by us of their intellectual property rights could result in a significant diversion of management s time and increased expenses. Any significant impairment of our intellectual property rights from any litigation we face could damage our reputation, impair our ability to compete and increase our expenses. If we fail to comply with the terms of our open source software license agreement, we could be required to release portions of our software codes, which could impair our ability to compete and result in lower revenue. If our products do not interoperate with our end users networks, servers or software applications, installations would be delayed or cancelled. We cannot predict our future capital needs and we may be unable to obtain additional financing to fund our operations. We may engage in future acquisitions that could disrupt our business, cause dilution to our stockholders, reduce our financial resources and result in increased expenses. We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets. We incur significant costs as a result of operating as a public company and our management devotes substantial time to new compliance initiatives. If we fail to maintain effective internal control over financial reporting in the future, the accuracy and timing of our financial reporting may be impaired. We expense stock options, which will reduce our net income or increase our net losses in future periods. Risks Related to the Ownership of Our Common Stock Our stock price is volatile and purchasers of our common stock could incur substantial losses. If securities analysts or industry analysts downgrade our stock, publish negative research or reports, or do not publish reports about our business, our stock price and trading volume could decline. A limited number of stockholders will have the ability to influence the outcome of director elections and other matters requiring stockholder approval. The price of our stock could decrease as a result of shares of common stock being sold in the market. Delaware law and our amended and restated certificate of incorporation and bylaws contain provisions that could delay or discourage takeover attempts that stockholders may consider favorable and result in a lower market price for our common stock.

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1253955--3/27/2008--COMPELLENT_TECHNOLOGIES_INC