Autodesk 2004 Annual Report Download - page 16

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Other Products
Autodesk Subscription Program
In addition to sales of new software licenses and upgrades, we offer customers a subscription option.
The Autodesk Subscription Program is available for a majority of our Design Solution products as well as
Discreet’s 3ds max product. Under the program, members who own the most recent version of the
underlying product participate in a simplified upgrade process, feature-enhancing extensions,
downloadable e-Learning courses and optional on-line support. Users benefit from incremental and new
releases of the underlying product and extensions over one year and multi-year contract periods.
Subscription program revenues are reported separately on our Consolidated Statements of Income as
Maintenance revenue.
Autodesk LocationLogic
LocationLogic provides wireless carriers with location services, including the ability to handle high
location services transaction volume, support for real-time data communication, and support for a variety
of end-user devices, including mobile phones, PDAs and portable computers. LocationLogic aggregates,
integrates and manages all information relevant to a user’s location and preferences and makes that
information useful for real-life applications, such as “Find me the nearest...” or “Provide the fastest route...”
PRODUCT DEVELOPMENT AND INTRODUCTION
We continue to enhance our product offerings and develop new products to meet changing customer
demands. Research and development expenditures represented 22% of fiscal 2004 net revenues, 23% of
fiscal 2003 net revenues and 20% of fiscal 2002 net revenues. Our software is primarily developed internally,
with occasional use of independent software developers. Additionally, we acquire products or technology
developed by others by purchasing some or all of the assets or stock of the entity that held ownership rights
to the technology.
The majority of our basic research and product development is performed in the U.S. and Canada, while
translation and localization of foreign-market versions, as well as some product development, is performed
by development teams or contractors in our local markets. We generally translate and localize our products
into French, Italian, German, Spanish, Japanese and various Chinese dialects. Portions of product
development, including some software development, localization, quality assurance and technical
publications, are performed in Europe and Asia.
The technology industry is characterized by rapid technological change in computer hardware,
operating systems and software, as well as changes in customer requirements and preferences. To keep
pace with these 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. However, 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
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