Autodesk 2014 Annual Report Download - page 82

2013 Annual Report
2014 Form 10-K 8
 Autodesk 3ds Max
Autodesk 3ds Max software provides 3D modeling, animation and rendering solutions that enable game developers,
design visualization professionals and visual effects artists to digitally create realistic images, animations and complex scenes
and to digitally communicate abstract or complex mechanical, architectural, engineering and construction concepts.
Creative Finishing
 Autodesk Flame, Autodesk Smoke, and Autodesk Lustre
Autodesk Flame software is an interactive real-time design, finishing, grading and visual effects solution for supervised
post-production. Autodesk Smoke software is a non-linear and non-compressed online editing, effects and finishing software
application and is used in commercials, music videos, corporate video, film as well as broadcast design projects. Autodesk
Lustre software is a high-performance color grading solution used by artists for creative look development and final color and
lighting effects for both film and television.
PRODUCT DEVELOPMENT AND INTRODUCTION
The technology industry is characterized by rapid technological change in computer hardware, operating systems and
software. In addition, our customers’ requirements and preferences rapidly evolve, as do their expectations of the performance
of our software. To keep pace with these changes, we maintain a vigorous program of new product development to address
demands in the marketplace for our products.
Just as the transition from mainframes to personal computers transformed the industry thirty years ago, we believe our
industry is undergoing a similar transition from the personal computer to cloud, social, and mobile computing. To address this
transition we have accelerated our move to the cloud and are offering more flexible licenses. For example, in fiscal 2014, we
began offering BIM 360, Product Lifecycle Management (“PLM”) and Fusion 360, our cloud based offerings, which provide
tools, including social and mobile capabilities, to help streamline design, collaboration, and data management processes. We
believe that customer adoption of these new offerings will continue to grow as customers across a range of industries began to
take advantage of the scalable computing power and flexibility provided through these new services.
We dedicate considerable technical and financial resources to research and development to further enhance our existing
products and to create new products and technologies. Research and development expenditures were $611.1 million or 27% of
fiscal 2014 net revenue, $600.0 million or 26% of fiscal 2013 net revenue and $566.5 million or 26% of fiscal 2012 net
revenue. Our software is primarily developed internally; however, we also use independent firms and contractors to perform
some of our product development activities. Additionally, we acquire products or technology developed by others by
purchasing or licensing products and technology from third parties. We continually review these investments in an effort to
ensure that we are generating sufficient revenue or gaining a competitive advantage to justify their costs.
The majority of our research and product development is performed in the United States, China, Singapore and Canada.
However, we employ experienced software developers in many of our other locations. Translation and localization of our
products are performed in a number of local markets, principally Singapore and Switzerland. We generally localize and
translate our products into German, French, Italian, Spanish, Russian, Japanese, Korean and simplified and traditional Chinese.
We plan to continue to manage significant product development operations internationally over the next several years. We
believe that our ability to conduct research and development at various locations throughout the world allows us to optimize
product development, lower costs and integrate local market knowledge into our development activities. We continually assess
the significant costs and challenges, including intellectual property protection, against the benefits of our international
development activities.
In addition, our business and our customers benefit from our relationships with a network of over 4,000 third-party
developers who develop and sell their own products that further enhance the range of integrated solutions available to our
customers.
For further discussion regarding risks from our product development and introduction efforts, see Item 1A, “Risk
Factors.”