Autodesk 2012 Annual Report Download - page 86

In particular, a critical component of our growth strategy is to have customers of our AutoCAD and AutoCAD LT
products expand their portfolios to include our suites. Over time, we aim to migrate customers using standalone Autodesk
products to expand their portfolio with our suites offerings. Should sales of licenses of our AutoCAD and AutoCAD LT or
standalone Autodesk flagship products decrease without a corresponding increase in suites product revenue or without
purchases of customer seats to our suites, 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 errors or
defects 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.
Further, given the rapid speed of changing customer expectations and advancement of technology inherent in the
software industry, the extensive and complex efforts required to create useful and widely accepted products and the rapid
evolution of cloud computing, mobile devices, new computing platforms and other technologies, our executive management
team must act quickly, continuously and with vision. Although we have articulated a strategy that we believe will fulfill these
challenges, if we fail to execute properly on that strategy, adapt that strategy as market conditions evolve, fail to internalize and
execute on that strategy, we may fail to meet our customers' expectations, fail to compete with our competitors' products and
technology and lose the confidence of our channel partners and employees. This in turn could adversely affect our business and
financial performance.
From time to time we realign or introduce new business and sales initiatives; if we fail to successfully execute and manage
these initiatives, our results of operations could be negatively impacted.
As part of our effort to accommodate our customers' needs and demands and the rapid evolution of technology, we from
time to time evolve our business and sales initiatives such as realigning our development and marketing organizations, and
expanding our portfolio of suites and our offering of software as a service, and realign our internal resources in an effort to
improve efficiency. We may take such actions without clear indications that they will prove successful. Market acceptance of
any new business or sales initiative is dependent on our ability to match our customers' needs at the right time and price. Often
we have limited prior experience and operating history in these new areas of emphasis. If any of our assumptions about
expenses, revenue or revenue recognition principles from these initiatives proves incorrect, or our attempts to improve
efficiency are not successful, our actual results may vary materially from those anticipated, and our financial results will be
negatively impacted.
Because we derive a substantial portion of our net revenue from a small number of products, including our AutoCAD-based
software products including suites, if these products are not successful, our net revenue will be adversely affected.
We derive a substantial portion of our net revenue from sales of licenses of a limited number of our products, including
AutoCAD software, products based on AutoCAD, which includes our suites that serve specific markets, upgrades to those
products and products that are interoperable with AutoCAD. Any factor adversely affecting sales of these products, including
the product release cycle, market acceptance, product competition, performance and reliability, reputation, price competition,
economic and market conditions and the availability of third-party applications, would likely harm our financial results. During
the fiscal year ended January 31, 2012, combined revenue from our AutoCAD and AutoCAD LT products, not including Suites
having AutoCAD or AutoCAD LT as a component, represented 33% of our total net revenue.
If we are not able to adequately protect our proprietary rights, our business could be harmed.
We rely on a combination of patent, copyright and trademark laws, trade secret protections, confidentiality procedures
and contractual provisions to protect our proprietary rights. Despite such efforts to protect our proprietary rights, unauthorized
parties from time to time have copied aspects of our software products or have obtained and used information that we regard as
proprietary. Policing unauthorized use of our software products is time-consuming and costly. While we have recovered some
revenue resulting from the unauthorized use of our software products, we are unable to measure the extent to which piracy of
our software products exists and we expect that software piracy will remain a persistent problem. Furthermore, our means of
protecting our proprietary rights may not be adequate.
Additionally, we actively protect the secrecy of our confidential information and trade secrets, including our source code.
If unauthorized disclosure of our source code occurs, we could potentially lose future trade secret protection for that source
code. The loss of future trade secret protection could make it easier for third-parties to compete with our products by copying
functionality, which could adversely affect our financial performance and our reputation. We also seek to protect our
confidential information and trade secrets through the use of non-disclosure agreements with our customers, contractors,
vendors and partners. However, it is possible that our confidential information and trade secrets may be disclosed or published
without our authorization. If this were to occur, it may be difficult and/or costly for us to enforce our rights, and our financial
performance and reputation could be negatively impacted.
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