Company: CXDO
Filing Date: 2025-03-04
Form Type: 10-K
Source: 0001654954-25-002287
Chunk: 25

Company: Crexendo, Inc.
Filing Date: 2025-03-04
Form: 10-K
Item: Item 1
Chunk 25
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 to Oracle Cloud makes us reliant on Oracle's technology, service quality, and financial stability. Any disruptions, such as outages or service degradations, in Oracle's cloud infrastructure could directly impacts our ability to deliver reliable services to our customers; ●Cost Uncertainty: While cloud services are typically scalable, costs can increase unexpectedly due to changes in usage patterns, unforeseen demand spikes, or price adjustments by Oracle. Over time, these costs may erode the anticipated financial benefits; ●Limited Control: Unlike physical data centers that we manage internally, the Oracle Cloud platform is controlled by Oracle, limiting our ability to customize or directly address issues within the infrastructure. This reduced control could delay problem resolution and affect our ability to respond to customer needs promptly; ●Security and Compliance Risks: While Oracle Cloud is designed with robust security features, migration to a third-party cloud platform introduces additional risks related to data security, privacy, and regulatory compliance. Any vulnerabilities or breaches in Oracle's systems could result in data loss, reputational damage, and potential legal liabilities for Crexendo; ●Service and Support Risks: The success of our cloud migration depends on Oracle’s ability to provide consistent, high-quality support. Any delays, inadequacies, or failures in Oracle's support services could hinder our migration efforts and disrupt our operations; ●Exit Risks: In the event that Oracle Cloud no longer meets our business needs, transitioning away from Oracle to another provider or back to an on-premises solution could involve significant time, cost, and operational risk.

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Operational Risks During Migration

The migration process itself involves significant technical and operational risks. Challenges include data migration errors, potential service outages, and ensuring compatibility between our existing systems and Oracle's infrastructure. Any disruptions during migration could negatively impact on our customers, damage our reputation, and lead to potential revenue loss or customer attrition.

Long-Term Dependence on Oracle's Business Strategy

Oracle’s future decisions regarding pricing, technology offerings, or strategic priorities may directly impact our operations and profitability. For example, changes in Oracle’s product roadmap, withdrawal of certain features, or discontinuation of services could force us to make additional investments or modifications to our infrastructure.

While we believe that the transition to Oracle Cloud will provide significant long-term benefits, the migration process and reliance on Oracle Cloud introduce substantial risks. These risks, if not effectively managed, could adversely affect our financial condition, operations, and customer relationships.

We depend on our senior management and other key personnel,