Autodesk 2004 Annual Report Download - page 44

Existing and increased competition may reduce our net revenues and profits.
The software industry has limited barriers to entry, and the availability of desktop computers with
continually expanding performance at progressively lower prices contributes to the ease of market entry.
The markets in which we compete are fairly mature and characterized by vigorous competition, both by
entry of competitors with innovative technologies and by consolidation of companies with
complementary products and technologies. In addition, some of our competitors have greater financial,
technical, sales and marketing and other resources. Furthermore, a reduction in the number and availability
of comparable third-party applications may adversely affect the sale of our products. Because of these and
other factors, competitive conditions in the industry are likely to intensify in the future. Increased
competition could result in continued price reductions, reduced net revenues and profit margins and loss
of market share, any of which would likely harm our business.
We believe that our future results depend largely upon our ability to offer products that compete
favorably with respect to reliability, performance, ease of use, range of useful features, continuing product
enhancements, reputation and price.
We rely on third party technologies and if we are unable to use or integrate these technologies, our product and
service development may be delayed.
We rely on certain software that we license from third parties, including software that is integrated with
internally developed software and used in our products to perform key functions. An example of this type
of software is the ACIS geometric solid modeler we license from Spatial Corp. These third-party software
licenses may not continue to be available on commercially reasonable terms, and the software may not be
appropriately supported, maintained or enhanced by the licensors. The loss of licenses to, or inability to
support, maintain and enhance any such software could result in increased costs, or in delays or reductions
in product shipments until equivalent software could be developed, identified, licensed and integrated,
which would likely harm our business.
In addition, for certain of our products and services, we rely on third party hardware and services, like
the workstations supplied by SGI. Financial difficulties or even failure of these third parties, like SGI, may
impact our ability to deliver such products and services and, as a result, may adversely impact our business.
Disruptions with licensing relationships, independent developers and third party developers could adversely
impact our business.
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 license agreements on favorable terms,
if at all, and any failure to do so could 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 design 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
would likely negatively impact these third-party developers and end users, which could harm our business.
Net revenues or earnings shortfalls or the volatility of the market generally may cause the market price of our
stock to decline, which could harm our business.
The market price for our common stock has experienced significant fluctuations and may continue to
fluctuate significantly. The market price for our common stock may be affected by a number of factors,
including the following: net revenues or earnings shortfalls and changes in estimates or recommendations
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