Autodesk 2008 Annual Report Download - page 85

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In addition to sales of new software licenses, we generate revenue through our Autodesk Subscription
Program and Autodesk Upgrade Program. These programs are available for a majority of our products and offer
our customers two alternatives to migrate to the most recent version of our products.
Under the Autodesk Subscription Program, customers who own a perpetual use license for the most recent
version of the underlying product are able to purchase maintenance that provides them with unspecified upgrades
when-and-if-available, and are able to download e-Learning courses and receive online support over a one year
or multi-year subscription period. Revenue from our Subscription Program is reported separately on our
Consolidated Statements of Income and is referred to throughout this document as maintenance revenue.
Concurrent with the release of a new product version, the Autodesk Upgrade Program allows customers,
who are not on the Subscription Program, to purchase upgrades, but only to the extent that they are still on a
supported version of the product. Typically, the cost to upgrade is based on a multiple of the number of versions
the customer is upgrading. An existing customer also has the option to upgrade to a different, discipline-specific
or 3D product, which generally has a higher price, for a premium fee; we refer to this as a crossgrade. The cost of
a crossgrade is substantially less than the cost of purchasing a new license and is available to subscription
customers as well. Revenue from our upgrade and crossgrade programs is reported on our Consolidated
Statements of Income in License and other.
Our ability to effectively distribute our products depends in part upon the financial and business condition of
our distributor and reseller networks. Computer software resellers and distributors are typically not highly
capitalized and have previously experienced difficulties during times of economic contraction and may do so in
the future. While we have processes to ensure that we assess the creditworthiness of dealers and distributors prior
to selling to them, if their financial condition were to deteriorate they might not be able to make repeat purchases.
The loss of, or a significant reduction in, business with any one of our major international distributors or large
resellers could harm our business. Our reliance on distributors and resellers subjects us to other risks; see
Item 1A, “Risk Factors,” for further discussion.
We intend to continue to make our products available in foreign languages. We believe that international
sales will continue to comprise the majority of our net revenue. Economic weakness in any of the countries
where we generate a significant portion of our net revenue, including the United States, could have an adverse
effect on our business. A summary of our financial information by geographic location is found in Note 11,
“Segments” in the Notes to Consolidated Financial Statements.
CUSTOMER AND RESELLER SUPPORT
We provide technical support and training to customers through a leveraged support model, augmented by
direct programs designed to address certain specific needs. Our customers rely primarily on the resellers and
distributors from which they purchased licenses to our products for technical support; however, we do provide
certain direct support for Media and Entertainment Segment Advanced Systems customers. We support the
resellers and distributors through technical product training, sales training classes, the Internet and direct
telephone support. We also provide online support directly to our customers through our Subscription Program.
There are also a number of user group forums in which customers are able to share information.
EDUCATIONAL PROGRAMS
We offer education programs and specially priced software purchasing options tailored for educational
institutions, students, and faculty to train the next generation of users. We also offer classroom support, including
standardized curricula developed by educators, instructor development, and a rich assortment of online learning
resources. Users trained on our products are broadly available both from universities and the existing workforce,
reducing the cost of training for our customers.
9
2008 Annua
l Report