Autodesk 2007 Annual Report Download - page 99

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2007 Annual Report
As mentioned above, while performing the voluntary stock option review, we identified that we
incorrectly recorded certain credits to resellers. Certain credits to resellers for sales of new and renewal
maintenance were recognized as a reduction of license and other revenues and maintenance revenues
in the period the transaction was billed. These credits should have been recorded as a reduction of
deferred maintenance revenue when the transaction was billed which would have resulted in a reduction
to maintenance revenues over the maintenance period. The impact of this restatement resulted in
adjustments to increase net revenues and decrease deferred revenues of $14.0 million in fiscal 2006 and
$5.1 million in fiscal 2005.
For more information regarding our restated financial statements, see “Financial Statements and
Supplementary Data” in Item 8 and “Restatement of Consolidated Financial Statements” in Note 2 of the
Notes to Consolidated Financial Statements, as well as “Selected Consolidated Financial Data” in Item 6
and “Quarterly Financial Information (Unaudited)” in Note 17 of the Notes to Consolidated Financial
Statements.
Strategy
Our goal is to be the world’s leading design software and services company for the building,
manufacturing, infrastructure, and media and entertainment industries. Our focus is to offer our customers
the ability to create and manage great designs and simulate reality through our software and to help them
experience their ideas before they become real.
We believe that our ability to make technology available to mainstream markets is one of our
competitive advantages. By innovating in existing technology categories, we bring powerful design
products to volume markets. Our products are designed to be easy to learn and use, and to provide
customers low cost of deployment, low total cost of ownership and a rapid return on investment. Our
architecture allows for extensibility and integration.
We have created a large global community of resellers, third-party developers and customers, which
provides us with a broad reach into volume markets. Our reseller network is extensive and provides our
customers with global resources for the purchase and support of our products as well as resources for
effective and cost-efficient training services. We have a significant number of registered third-party
developers, creating products that run on top of our products, further extending our reach into volume
markets. Our installed base of millions of users has made Autodesk’s products a worldwide design software
standard.
Users trained on Autodesk products are broadly available both from universities and the existing
workforce, reducing the cost of training for our customers. We offer education programs and specially
priced software-purchasing options tailored for educational institutions, students, and faculty to train the
next generation of users. We also offer classroom support, including standardized curricula developed by
educators, instructor development, and a rich assortment of online learning resources.
Our growth strategy derives from these core strengths. We continue to increase the business value
of our desktop design tools for our customers in a number of ways. We improve the performance and
functionality of existing products with each new release, and we have increased the frequency of most
of our releases. Our most recent major product releases occurred in March 2007. Beyond our horizontal
design products, we develop products addressing specific vertical market needs. In addition, we believe
that migration of our customers from our 2D products to our 3D model-based products, which generally
have higher prices, presents a significant growth opportunity. While the rate of migration to 3D varies from
industry to industry, adoption of 3D design software should increase the productivity of our customers
in all industries and result in richer design data. However, this migration also poses various risks to us.
In particular, if we do not successfully convert our 2D customer base to our 3D model-based products
as expected, and sales of our 2D products decrease without a corresponding increase in customer seats
of our 3D model-based products, we would not realize the growth we expect and our business would be
adversely affected.