Autodesk 2003 Annual Report Download - page 16

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changes, we maintain an aggressive program of new product development to address demands in the marketplace
for increased connectivity and use of digital data created by our products. We dedicate considerable technical and
financial resources to research and development to further enhance our existing products and to create new
products and technologies. These investments may not result in sufficient revenue generation to justify their costs
or our competitors may introduce new products and services that achieve acceptance among our current
customers, either of which would likely adversely affect our competitive position.
Our software products are complex and, despite extensive testing and quality control, may contain errors or
defects. These defects or errors could result in corrective releases to our software products, damage to our
reputation, loss of revenues, an increase in product returns or lack of market acceptance of our products, any of
which would likely harm our business.
We actively recruit and hire experienced software developers and license and acquire complementary
software technologies and businesses. In addition, we actively collaborate with and support independent software
developers who offer products that enhance and complement our products.
Independent firms and contractors perform some of our product development activities, while other
technologies are licensed from third parties. Licenses may restrict use of such technology in ways that negatively
affect our business. We generally either own or license the software developed by third parties. Because talented
development personnel are in high demand, independent developers, including those who currently develop
products for us, may not be able or willing to provide development support to us in the future. Similarly, we may
not be able to obtain and renew existing license agreements on favorable terms, if at all, and any failure to do so
would likely harm our business.
Our business strategy has historically depended in part on our relationships with third-party developers, who
provide products that expand the functionality of our software. Some developers may elect to support other
products or may experience disruption in product development and delivery cycles or financial pressure during
periods of economic downturn. In particular markets, this disruption could negatively impact these third-party
developers and end users, which could harm our business.
MARKETING AND SALES
We sell our products and services both directly to customers, which include large corporations, and through
established distributors and resellers. Our customer-related operations are divided into three geographic regions,
the Americas, Europe and Asia/Pacific, and are supported by global marketing and sales organizations. These
organizations develop and manage overall marketing and sales programs and work closely with a network of
domestic and foreign offices.
We also work directly with reseller and distributor sales organizations, computer manufacturers, other
software developers and peripheral manufacturers in cooperative advertising, promotions and trade-show
presentations. We employ mass-marketing techniques such as web casts, seminars, telemarketing, direct mailings
and advertising in business and trade journals. We have a worldwide user group organization dedicated to the
exchange of information related to the use of our products.
Our ability to effectively distribute our products depends in part upon the financial and business condition of
our reseller network. Computer software dealers and distributors are typically not highly capitalized and have
previously experienced difficulties during times of economic contraction, such as current worldwide economic
conditions, and may do so in the future. In addition, the changing distribution models resulting from the Internet,
from increased focus on direct sales to major accounts or from two-tiered distribution may impact our reseller
network in the future. While no single customer, distributor or reseller accounted for more than 10 percent of our
consolidated net revenues in any of the past three fiscal years, the loss of, or a significant reduction in, business
or failure to achieve anticipated levels of sell-through with any one of our major international distributors or
large resellers could harm our business.
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