Autodesk 2008 Annual Report Download - page 93

ITEM 1A. RISK FACTORS
We operate in a rapidly changing environment that involves a number of risks, many of which are beyond
our control. In addition to the other information contained in this Form 10-K, the following discussion highlights
some of these risks and the possible impact of these factors on future results of operations. If any of the following
risks actually occur, our business, financial condition or results of operations may be adversely impacted, causing
the trading price of our common stock to decline. In addition, these risks and uncertainties may impact the
“forward-looking” statements described elsewhere in this Form 10-K and in the documents incorporated herein
by reference. They could affect our actual results of operations, causing them to differ materially from those
expressed in “forward-looking” statements.
General economic conditions may affect our net revenue and harm our business.
As our business has expanded globally, we have become increasingly subject to the risks arising from
adverse changes in domestic and global economic and political conditions. Economic growth in the United States
slowed in the fourth quarter of fiscal 2008. If economic growth in the United States and other countries’
economies slows, or continues to slow in the United States, many customers may delay or reduce technology
purchases. This could result in reductions in sales of our products, longer sales cycles, slower adoption of new
technologies and increased price competition. In addition, weakness in the end-user market could negatively
affect the cash flow of our distributors and resellers who could, in turn, delay paying their obligations to us,
which would increase our credit risk exposure and cause delays in our recognition of revenue on future sales to
these customers. Any of these events would likely harm our business, results of operations and financial
condition.
Our efforts to develop and introduce new product and service offerings expose us to risks such as limited
customer acceptance, costs related to product defects and large expenditures that may not result in additional
net revenue.
Rapid technological changes, as well as changes in customer requirements and preferences, characterize the
software industry. We are devoting significant resources to the development of technologies, like our vertical
design products and our digital prototyping and collaboration products. In addition, we are introducing new
business models that require a considerable investment of technical and financial resources. Such investments
may not result in sufficient revenue generation to justify their costs, or competitors may introduce new products
and services that achieve acceptance among our current customers, adversely affecting our competitive position.
In particular, a critical component of our growth strategy is to convert our customers of AutoCAD and AutoCAD
LT to related vertical industry products and to our 3D model-based design products such as the Autodesk
Inventor products, the Revit products, AutoCAD Civil 3D and NavisWorks products. Should sales of AutoCAD,
AutoCAD upgrades and AutoCAD LT products decrease without a corresponding conversion of customer seats
to our 2D vertical products and 3D model-based design products, our results of operations will be adversely
affected.
Additionally, the software products we offer are complex, and despite extensive testing and quality control,
may contain errors or defects. These defects or errors could result in the need for corrective releases to our
software products, damage to our reputation, loss of revenue, an increase in product returns or lack of market
acceptance of our products, any of which would likely harm our business.
Net revenue or earnings shortfalls or the volatility of the market generally may cause the market price of our
stock to decline.
The market price for our common stock has experienced significant fluctuations and may continue to
fluctuate significantly. The market price for our common stock may be affected by a number of factors, including
shortfalls in our net revenue, earnings or key performance metrics; changes in estimates or recommendations by
securities analysts; the announcement of new products or product enhancements by us or our competitors;
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2008 Annua
l Report