v3.7.0.1

CONSOLIDATED BALANCE SHEET COMPONENTS | 3 Months Ended
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Mar. 31, 2017
Balance Sheet Related Disclosures [Abstract] |
CONSOLIDATED BALANCE SHEET COMPONENTS | CONSOLIDATED BALANCE SHEET COMPONENTS Prepaid expenses and other current assets Prepaid expenses and other current assets consist of the following:
|  |  | March 31, |  | December 31,
|  |  | 2017 |  | 2016
|  |  | (in thousands)
Deferred sales commissions, current portion |  |  | $ | 3,093 |  |  | 2,932 |
Prepaid expenses |  |  | 3,031 |  |  | 2,032 |
Other |  |  | 803 |  |  | 1,325 |
Total prepaid expenses and other current assets |  |  | $ | 6,927 |  |  | $ | 6,289 |
Property and Equipment, net Property and equipment, net consists of the following:
|  |  |  | March 31, |  | December 31,
|  | Estimated Useful Lives |  | 2017 |  | 2016
|  |  |  | (in thousands)
Computer and other equipment |  | 3 years |  | $ | 1,902 |  |  | $ | 1,920 |
Manufacturing, research and development laboratory equipment |  | 3 years |  | 4,348 |  |  | 4,314 |
Software |  | 2 to 5 years |  | 8,217 |  |  | 8,217 |
Office furniture and equipment |  | 3 to 7 years |  | 2,053 |  |  | 2,070 |
Leasehold improvements |  | shorter of useful life or lease term |  | 1,008 |  |  | 1,008 |
Property and equipment, gross |  |  |  | 17,528 |  |  | 17,529 |
Less: Accumulated depreciation and amortization |  |  |  | (9,322 | ) |  | (8,521 | )
Property and equipment, net |  |  |  | $ | 8,206 |  |  | $ | 9,008 |
The 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 $0.8 million and $0.9 million for the three months ended March 31, 2017 and 2016, respectively. Office furniture and equipment classified under capital lease was $1.2 million at March 31, 2017 and December 31, 2016 respectively, and the related accumulated depreciation was $0.2 million and $0.2 million at March 31, 2017 and December 31, 2016 respectively. Other assets Other assets consist of the following:
|  |  | March 31, |  | December 31,
|  |  | 2017 |  | 2016
|  |  | (in thousands)
Deferred sales commissions, non-current portion |  |  | $ | 3,143 |  |  | $ | 3,115 |
Investment in privately held company |  |  | 1,500 |  |  | 1,500 |
Other |  |  | 515 |  |  | 485 |
Total other assets |  |  | $ | 5,158 |  |  | $ | 5,100 |
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 March 31, 2017, the fair value of the convertible note approximated its carrying value. The Company did not recognize an impairment for the three months ended March 31, 2017 and 2016, respectively, 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 Company does not intend to liquidate this investment in the next 12 months, the Company has classified the convertible note as other assets on the condensed consolidated balance sheet. Accrued Liabilities Accrued liabilities consist of the following:
|  |  | March 31, |  | December 31,
|  |  | 2017 |  | 2016
|  |  | (in thousands)
Accrued compensation |  |  | $ | 7,758 |  |  | $ | 7,230 |
Accrued expenses and other liabilities |  |  | 1,170 |  |  | 1,445 |
Warranty liability, current portion |  |  | 516 |  |  | 625 |
Total accrued liabilities |  |  | $ | 9,444 |  |  | $ | 9,300 |
Deferred Revenue Deferred revenue consists of the following:
| March 31, |  | December 31,
| 2017 |  | 2016
| (in thousands)
Products | $ | 1,776 |  |  | $ | 1,220 |
Software subscription and services | 63,131 |  |  | 64,684 |
Total deferred revenue | 64,907 |  |  | 65,904 |
Less: current portion of deferred revenue | 31,847 |  |  | 31,727 |
Non-current portion of deferred revenue | $ | 33,060 |  |  | $ | 34,177 |
Warranty Liability The following table summarizes the activity related to the Company’s accrued liability for estimated future warranty:
| Three Months Ended March 31,
| 2017 |  | 2016
| (in thousands)
Beginning balance | $ | 975 |  |  | $ | 978 |
Charges to operations | 121 |  |  | 174 |
Obligations fulfilled | (197 | ) |  | (104 | )
Changes in existing warranty | (42 | ) |  | (51 | )
Total product warranties | $ | 857 |  |  | $ | 997 |
Current portion | $ | 516 |  |  | $ | 650 |
Non-current portion | $ | 341 |  |  | $ | 347 |
Changes in existing warranty reflect a combination of changes in expected warranty claims and changes in the related costs to service such claims.

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