Autodesk 2006 Annual Report Download - page 55

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 selling to them, if their financial condition were to deteriorate, they might not be able to make repeat
purchases. 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 net revenues. Economic weakness in any of the
countries where we generate 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 certain specific needs directly. End users rely primarily on their resellers and distributors
for technical support; however, we do provide certain direct support for our high-end Media and Entertainment
Segment 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 directly to
end users 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 specific uses. We offer
several programs that provide marketing, sales, technical support and programming tools to developers who
develop add-on applications for our products.
BACKLOG
We typically ship products shortly after receipt of an order, which is common in the software industry. Our
backlog is primarily comprised of deferred revenue. Deferred revenue is derived from our subscription program,
Autodesk Buzzsaw services, consulting services and deferred license sales. Backlog also includes current software
license product orders which have not yet shipped. The category of current software license product orders which
we have not yet shipped consists of orders from customers with approved credit status for currently available
license software products and may include both orders with current ship dates and orders with ship dates beyond
the current fiscal period. Aggregate backlog was $302.6 million at January 31, 2006, of which $285.6 million was
deferred revenue and $17.0 million related to current software license product orders which had not yet shipped
at the end of the fiscal year. Aggregate backlog was $226.2 million at January 31, 2005, of which $194.2 million
was deferred revenue and $32.0 million current software license product orders which had not yet shipped at
the end of the fiscal year. Deferred revenue increased over the prior year due primarily to the success of our
subscription program, and we expect it to continue to increase in the future. The decrease in current software
license product orders which had not yet shipped at the end of the 2006 fiscal year as compared to the 2005
fiscal year is attributable to, among other things, the change in timing of annual product retirements from the
last quarter of the fiscal year to the first quarter of the fiscal year. We do not believe that backlog as of any
particular date is indicative of future results.
2006 Annual Report
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