859014--5/27/2010--COMPUWARE

related topics

{product, market, service}

{tax, income, asset}

{property, intellectual, protect}

{condition, economic, financial}

{personnel, key, retain}

{system, service, information}

{operation, international, foreign}

{acquisition, growth, future}

{stock, price, operating}

{stock, price, share}

{competitive, industry, competition}

The market for application services is in its early stages of development with emerging competitors. As the market matures, competition may increase and could have a material negative impact on our results of operations. If we are not successful in implementing our professional services strategy, our operating margins may decline materially. We may fail to achieve our forecasted financial results due to inaccurate sales forecasts or other unpredictable factors. If we fail to meet the expectations of analysts or investors, our stock price could decline substantially. Future changes in the United States and global economies may reduce demand for our products and services, which may have a material adverse effect on our revenues and operating results. Defects or disruptions in our web performance services or application services networks or interruptions or delays in service would impair the delivery of our on-demand service and could diminish demand for our services and subject us to substantial liability. Future changes in the U.S. domestic automotive manufacturing business could reduce demand for our professional services and application services, which may have a material negative effect on our revenues and operating results. If the fair value of our long-lived assets deteriorated below the carrying value of these assets, recognition of an impairment loss would be required, which could materially and adversely affect our financial results. Our software technology may infringe the proprietary rights of others. Our results could be adversely affected by increased competition, pricing pressures and technological changes within the software products market. The market for professional services is highly competitive, fragmented and characterized by low barriers to entry. We must develop or acquire product enhancements and new products to succeed. Acquisitions may be difficult to integrate, disrupt our business or divert the attention of our management and may result in financial results that are different than expected. We are exposed to exchange rate risks on foreign currencies and to other international risks that may adversely affect our business and results of operations. Current laws may not adequately protect our proprietary rights. The loss of certain key employees and technical personnel or our inability to hire additional qualified personnel could have a material adverse effect on our business. Unanticipated changes in our operating results or effective tax rates, or exposure to additional income tax liabilities, could affect our profitability. Our stock repurchase plan may be suspended or terminated at any time, which may result in a decrease in our stock price.

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859014--5/27/2010--COMPUWARE_CORP