TIBCO Software (TIBX)

Research and Development

Our success is heavily dependent upon our ability to develop new products and technologies and to enhance our existing products. We expect that a majority of our research and development activities will focus on enhancing and extending our TIBCO products and that such enhancements and new products will be developed internally. However, as part of our development strategy, we may also license or acquire externally developed technologies for inclusion in our product lines. We expect that we will continue to commit significant resources to product development in the future. Product development costs are recorded as research and development expenses. Our research and development expenses, including stock-based compensation expense, were $106.6 million, $92.9 million and $85.9 million in fiscal years 2008, 2007 and 2006, respectively. To date, all product development costs have been expensed as incurred, because the time period between achieving technological feasibility for a product and the general availability of such product has typically been very short.

Research and Development

Our success is heavily dependent on our ability to develop new products and technologies and to enhance our existing products. We expect that a majority of our research and development activities will focus on enhancing and extending our TIBCO products and that such enhancements and new products will be developed internally. However, as part of our development strategy, we may also license or acquire externally developed technologies for inclusion in our product lines. We expect that we will continue to commit significant resources to product development in the future. Product development costs are recorded as research and development

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expenses. Our research and development expenses, including stock-based compensation expense, were $92.9 million, $85.9 million and $73.1 million in fiscal years 2007, 2006 and 2005, respectively. To date, all product development costs have been expensed as incurred, because the time period between achieving technological feasibility for a product and the general availability of such product has typically been very short.

Research and
Development

Our success is heavily dependent on our ability to develop new products and technologies and to enhance our existing
products. We expect that a majority of our research and development activities will focus on enhancing and extending our TIBCO products and that such enhancements and new products will be developed internally. However, as part of our development
strategy, we may also license or acquire externally developed technologies for inclusion in our product lines. We expect that we will continue to commit significant resources to product development in the future. Product development costs are
recorded as research and development

6

Table of Contents

expenses. Our research and development expenses, including stock-based compensation expense, were $92.9 million, $85.9 million and $73.1 million in fiscal
years 2007, 2006 and 2005, respectively. To date, all product development costs have been expensed as incurred, because the time period between achieving technological feasibility for a product and the general availability of such product has
typically been very short.

Research and Development

Our success is heavily dependant on our ability to develop new products and technologies and to enhance our existing products. We expect that a majority of our research and development activities will focus on enhancing and extending our TIBCO products and that such enhancements and new products will be developed internally. However, as part of our development strategy, we may license or acquire externally developed technologies for integration into our product lines. In fiscal year 2006, we continued our development focus on creating products that interoperate. We expect that we will continue to commit significant resources to product development in the future. Product development costs are recorded as research and development expenses. Our research and development expenses, including stock-based compensation expense, were $85.9 million, $73.1 million and $61.1 million in fiscal years 2006, 2005 and 2004, respectively. To date, all product development costs have been expensed as incurred because the time period between the achievement of technical feasibility for a product and the general availability of such product has typically been very short.