CONSOLIDATED BALANCE SHEET COMPONENTS

Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following:



	As of December 31,
	2016		2015
	(in thousands)
Deferred sales commissions, current portion (Note 1)	$	2,932	$	3,484
Prepaid expenses	2,032		2,950
Other	1,006		1,179
Total prepaid expenses and other current assets	$	5,970	$	7,613

Property and Equipment, net

Property and equipment, net consists of the following:



		As of December 31,
	Estimated Useful Lives	2016			2015
		(in thousands)
Computer and other equipment	3 years	$	1,920		$	1,704
Manufacturing, research and development laboratory equipment	3 years	4,314			4,476
Software	2 to 5 years	8,217			8,470
Office furniture and equipment	3 to 7 years	2,070			1,041
Leasehold improvements	shorter of useful life or lease term	1,008			614
Property and equipment, gross		17,529			16,305
Less: Accumulated depreciation and amortization		(8,521		)	(7,149		)
Property and equipment, net		$	9,008		$	9,156

Software category includes the capitalized internal-use software for the Company's cloud service platform. In April 2015, the Company completed and launched the next generation of its cloud services platform, and began to amortize these capitalized costs to cost of software subscription and services revenue on a straight-line basis over an estimated useful life of the software of five years.

Depreciation and amortization expense was $3.5 million, $3.5 million and $2.2 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Office furniture and equipment classified under capital lease at December 31, 2016 was $1.2 million and the related accumulated depreciation was $0.2 million.

Other assets

Other assets consist of the following:



	As of December 31,
	2016		2015
	(in thousands)
Deferred sales commissions, non-current portion (Note 1)	$	3,115	$	3,254
Investment in privately held company	1,500		—
Other	485		426
Total other assets	$	5,100	$	3,680

In January 2016, the Company paid $1.5 million in cash to purchase a convertible note issued by a privately held company, which provides Wi-Fi application and analytics. The Company currently has no voting rights, investor rights or significant influence over the privately held company. The convertible note has been recorded at carrying value. Since the convertible note has no readily determinable market value, the Company has categorized it as a Level 3 asset in the fair value hierarchy. As of December 31, 2016, the fair value of the convertible note approximated its carrying value. The Company did not recognize an impairment for the year ended December 31, 2016, as there were no identified events or changes in circumstances that might have a significant adverse impact on the carrying values of the investment. Since the convertible note has a two-year contractual term and the Company does not intend to liquidate it in the next 12 months, the Company has classified the convertible note as other assets on the consolidated balance sheet.

Accrued Liabilities

Accrued liabilities consist of the following:



	As of December 31,
	2016		2015
	(in thousands)
Accrued compensation	$	7,230	$	9,410
Accrued expenses and other liabilities	1,445		1,801
Warranty liability, current portion	625		645
Total accrued liabilities	$	9,300	$	11,856

Deferred Revenue

Deferred revenue consists of the following:



	As of December 31,
	2016		2015
	(in thousands)
Products	$	1,220	$	3,199
Software subscription and services	64,684		56,063
Total deferred revenue	65,904		59,262
Less: current portion of deferred revenue	31,727		27,893
Non-current portion of deferred revenue	$	34,177	$	31,369

Warranty Liability

The following table summarizes the activity related to the Company’s accrued liability for estimated future warranty:



	As of December 31,
	2016			2015			2014
	(in thousands)
Beginning balance	$	978		$	891		$	923
Charges to operations	672			1,079			536
Obligations fulfilled	(457		)	(578		)	(557		)
Changes in existing warranty	(218		)	(414		)	(11		)
Total product warranties	$	975		$	978		$	891
Current portion	$	625		$	645		$	285
Non-current portion	$	350		$	333		$	606

Changes in existing warranty reflect a combination of changes in expected warranty claims and changes in the related costs to service such claims.