Autodesk 2005 Annual Report Download - page 22

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and may in the future lead to, among other things, costly litigation or product shipment delays, which could harm
our business.
We retain ownership of software we develop. All software is licensed to users and provided in object code
pursuant to either shrink-wrap, embedded or on-line licenses, or signed license agreements. These agreements
contain restrictions on duplication, disclosure and transfer.
We believe that because of the limitations of laws protecting our intellectual property and the rapid, ongoing
technological changes in both the computer hardware and software industries, we must rely principally upon
software engineering and marketing skills to maintain and enhance our competitive market position.
While we have recovered some revenues resulting from the unauthorized use of our software products, we
are unable to measure the full extent to which piracy of our software products exists. We believe, however, that
software piracy is and can be expected to be a persistent problem.
PRODUCTION AND SUPPLIERS
Production of our Design Solutions Segment and certain Discreet Segment software products involves
duplication of the software media and the printing of user manuals. The purchase of media and the transfer of
the software programs onto media for distribution to customers are performed by us and by licensed
subcontractors. Media for our products include CD-ROMs which are available from multiple sources. User
manuals for our products and packaging materials are produced to our specifications by outside sources.
Production is generally performed in leased facilities operated by us. Some product assembly is also performed
by independent third-party contractors. To date, we have not experienced any material difficulties or delays in
the production of our software and documentation.
In addition, the Discreet Segment has historically relied on third-party vendors for the supply of hardware
components used in its systems. Many of Discreet’s software products currently run on workstations
manufactured by Silicon Graphics, Inc. (“SGI”). There are significant risks associated with this reliance on SGI
and we may be impacted by unforeseen difficulties associated with adapting our products to future SGI products
and the timing of the development and release of SGI products. We continue development of Discreet Segment
products for use on alternative platforms (e.g. linux) to help mitigate these risks.
EMPLOYEES
As of January 31, 2005, we employed 3,477 people. None of our employees in the United States are
represented by a labor union; however, in certain foreign countries, our employees are represented by worker
councils. We have never experienced any work stoppages and believe our employee relations are good. Reliance
upon employees in other countries entails various risks that possible further government instability or regulation
unfavorable to foreign owned businesses could negatively impact our business in the future.
Competition in recruiting personnel in the software industry, especially highly skilled engineers, is intense.
We believe our continued growth and future success is highly dependent on our continued ability to attract,
retain and motivate highly skilled employees.
BUSINESS COMBINATIONS
Over the past three years, we acquired new technology or supplemented our technology by purchasing
businesses focused in specific markets or industries. During this time period, we acquired the following
businesses:
10