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.