Autodesk 2006 Annual Report Download - page 56

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COMPETITION
The markets for our products are highly competitive and subject to rapid change. In addition, in each of our
markets, there are numerous regional and specialized software and services companies, with which we compete.
Design Solutions Segment
Our Design Solutions Segment primarily competes with vendors that specialize primarily in one of the three
industry segments in which we compete. Our competitors range from large, global, publicly traded software
companies to small, geographically focused firms. Our primary global competitors in this segment include
Dassault Systemes and its subsidiary SolidWorks Corporation, Parametric Technology Corporation,
UGS Corporation, Bentley Systems Inc. Environmental Systems Research Institute, Inc. (ESRI), and Intergraph
Corporation. In addition, in each of our markets, there are numerous regional and specialized software and
services companies, with which we compete.
To address the lifecycle management market opportunity, we are developing and introducing products that
allow downstream users of data, both within and external to our customer enterprises, to manage and share
their designs. These products allow us to expand our customer base from the design and engineering
departments to adjacent departments and into the supply chain. This expansion may ultimately put us in
competition with Enterprise Resource Planning (“ERP”) vendors such as Oracle Corporation and SAP AG, which
have a loyal customer base within these adjacent departments. Recent consolidation within the ERP market,
dominance by a few large corporations, as well as their expansion in new technologies will increase competition
in this market.
Media & Entertainment Segment
Our Media and Entertainment Segment competes in highly competitive international markets that are often
subject to rapid technological change. We compete with a wide range of different companies from large publicly-
traded corporations to small private entities. Large organizations that produce products that compete in some
or all of our markets include Avid Technology, Adobe Systems, Apple Computer Inc, SONY and Thomson. The
media and entertainment market is highly fragmented with complex interdependencies between many of the
larger corporations. As a result, some of our competitors also own subsidiaries that are our clients or are our
partners in developing or bringing to market some of our solutions.
The software industry has limited barriers to entry, and the availability of desktop computers with
continually expanding performance capacity at progressively lower prices contributes tothe ease of market entry.
The design software market is characterized by vigorous competition in each of the vertical markets in which
we compete, both by entry of competitors with innovative technologies and by consolidation of companies with
complementary products and technologies. In addition, the availability of third-party application software is a
competitive factor within all of our markets.
Because of these and other factors, competitive conditions in these industries are likely to continue to
intensify in the future. Increased competition could result in price reductions, reduced net revenues and profit
margins and loss of market share, any of which could harm our business. Furthermore, in certain markets, some
of our competitors have greater financial, technical, sales and marketing and other resources.
We believe that our future results depend largely upon our ability to offer new products and to continue
to provide existing product offerings that compete favorably with respect to ease of use, reliability, performance,
range of useful features, continuing product enhancements, reputation, price and training.
INTELLECTUAL PROPERTY AND LICENSES
We protect our intellectual property through a combination of patents, copyright and trademark laws, trade
secrets, confidentiality procedures and contractual provisions. Nonetheless, our intellectual property rights may
not be successfully asserted in the future or may be invalidated, circumvented or challenged. In addition, the
laws ofvarious foreigncountrieswhere our products are distributed donot protect our intellectual propertyrights
to the same extent as U.S. laws. Enforcement of intellectual property rights against alleged infringers can
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