Autodesk 2004 Annual Report Download - page 17

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negatively affect our business. We 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 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. These disruptions could negatively impact
these third-party developers and, in turn, end users, which could harm our business.
MARKETING AND SALES
We sell our products and services both through authorized distributors and resellers and directly to
customers, primarily large corporations. Our customer-related operations are divided into three geographic
regions, the Americas, Europe/Middle East/Africa 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 distributor and reseller networks. Computer software dealers and distributors are typically
not highly capitalized and have previously experienced difficulties during times of economic contraction
and may do so in the future. While we have processes to ensure that we assess the creditworthiness of
dealers and distributors prior to sales to them, if their financial condition were to deteriorate, they might not
be able to make repeat purchases. While no single customer, distributor or reseller accounted for more
than 10% of our consolidated net revenues in any of the past three fiscal years, the loss of, or a significant
reduction in, business with any one of our major international distributors or large U.S. resellers could harm
our business.
We intend to continue to make our products available in foreign languages. We believe that
international sales will continue to comprise a significant portion of our consolidated net revenues.
Economic weakness in any of the countries which contribute a significant portion of our net revenues would
likely have a material adverse effect on our business. A summary of our financial information by geographic
location is found in Note 13, “Segments” in the Notes to Consolidated Financial Statements.
CUSTOMER AND RESELLER SUPPORT
We provide technical support and training to customers through a leveraged model, augmented by
programs designed to address specific direct needs. End users rely primarily on their resellers and
distributors for technical support; however, we do provide certain direct support for our high-end
Discreet hardware systems. We support the resellers and distributors through technical product training,
sales training classes, the Internet and direct telephone support. We also provide optional online
support through our subscription program and support content is also available on the Product Support
portion of our Internet site. There are also a number of user group forums in which customers are able to
share information.
DEVELOPER PROGRAMS
One of our key strategies is to maintain an open-architecture design of our software products to
facilitate third-party development of complementary products and industry-specific software solutions.
This approach enables customers and third parties to customize our products for a wide variety of highly
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