Autodesk 2005 Annual Report Download - page 50

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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. 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, product line changes, 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 and third party developers could adversely impact our business.
We license certain key technologies from third parties. Licenses may be restricted in the term or the use
of such technology in ways that negatively affect our business. Similarly, we may not be able to obtain or
renew license agreements for key technology 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 tosupport
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.
As a result ofour strategy of partnering with other companies for product development our product delivery schedules
could be adversely affected if we experience difficulties with our product development partners.
We partner with certain independent firms and contractors to perform some of our product development
activities. We believe our partnering strategy allows us to, among other things, achieve efficiencies in developing
new products and maintaining and enhancing existing product offerings.
Accordingly, our partnering strategy creates a dependency on such independent developers. Independent
developers, including those who currently develop products for us in the United States and throughout the world,
may not be able or willing to provide development support to us in the future. In addition, use of development
resources through consulting relationships, particularly in non-US jurisdictions with developing legal systems,
may be adversely impacted by, and expose us to risks relating to, evolving employment, export and intellectual
property laws. These risks could, among other things, expose our intellectual property to misappropriation and
result in disruptions to product delivery schedules.
Our international operations expose us to significant regulatory, intellectual property, collections, exchange
fluctuations, taxation and other risks, which could adversely impact our future net revenues and increase our
net expenses.
We anticipate that international operations will continue to account for a significant portion of our
consolidated net revenues and will provide significant support to our overall development efforts. Risks inherent
in our international operations include the following: unexpected changes in regulatory practices and tariffs,
difficulties in staffing and managing foreign sales and development operations, longer collection cycles for
accounts receivable, potential changes in tax laws, tax arrangements with foreign governments and laws
regarding the management of data, greater difficulty in protecting intellectual property, possible future
limitations upon foreign owned business, and the impact of fluctuating exchange rates between the U.S. dollar
and foreign currencies in markets where we do business.
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