Sourcefire (FIRE)

techniques to gain access to and attack systems and networks. Customers look to our products to continue to protect their networks against these threats in this increasingly complex environment without sacrificing network efficiency or causing significant network downtime. The software in our products is especially complex because it needs to effectively identify and respond to new and increasingly sophisticated methods of attack, without impeding the high network performance demanded by our customers. Although the market expects speedy introduction of software to respond to new threats, the development of these products is difficult and the timetable for commercial release of new products is uncertain. Therefore, we may in the future experience delays in the introduction of new products or new versions, modifications or enhancements of existing products. If we do not quickly respond to the rapidly changing and rigorous needs of our customers by developing and introducing on a timely basis new and effective products, upgrades and services that can respond adequately to new security threats, our competitive position and business prospects will be harmed.

 

 

Our business is influenced by a range of factors that are beyond
our control. These include:

 

 

A general weakening of the economy in the United States or of
the global economy, or a curtailment in corporate spending due
to factors that affect one or more of the industries to which we
sell our products and services, could delay and decrease
customer purchases, which could adversely affect our revenue
growth and results of operations. For example, the decline in
operating performance of financial institutions associated with
the problems in the subprime mortgage industry could cause our
current or potential financial institution customers to delay or
forego purchases of our products and services. Our customers
include, but are not limited to, financial institutions, defense
contractors, health care providers, IT companies,
telecommunications companies and retailers. Similarly, a
reduction in the budgets or spending priorities of government
agencies could adversely affect our revenue growth and results
of operations.

 

The
market for network security products is rapidly evolving, and
the complex technology incorporated in our products makes them
difficult to develop. If we do not accurately predict, prepare
for and respond promptly to technological and market
developments and changing customer needs, our competitive
position and prospects will be harmed.

 

The market for network security products is relatively new and
is expected to continue to evolve rapidly. Moreover, many
customers operate in markets characterized by rapidly changing
technologies and business plans, which require them to add
numerous network access points and adapt increasingly complex
enterprise networks, incorporating a variety of hardware,
software applications, operating systems and networking
protocols. In addition, computer hackers and others who try to
attack networks employ increasingly sophisticated new

techniques to gain access to and attack systems and networks.
Customers look to our products to continue to protect their
networks against these threats in this increasingly complex
environment without sacrificing network efficiency or causing
significant network downtime. The software in our products is
especially complex because it needs to effectively identify and
respond to new and increasingly sophisticated methods of attack,
without impeding the high network performance demanded by our
customers. Although the market expects speedy introduction of
software to respond to new threats, the development of these
products is difficult and the timetable for commercial release
of new products is uncertain. Therefore, we may in the future
experience delays in the introduction of new products or new
versions, modifications or enhancements of existing products. If
we do not quickly respond to the rapidly changing and rigorous
needs of our customers by developing and introducing on a timely
basis new and effective products, upgrades and services that can
respond adequately to new security threats, our competitive
position and business prospects will be harmed.