Autodesk 2009 Annual Report Download - page 107

Our growth strategy derives from these core strengths. We continue to increase the business value of our
design tools in a number of ways. We improve the performance and functionality of existing products with each
new release. Our most recent product release commenced in March 2009. Beyond our 2D horizontal design
products, we develop products addressing industry-specific needs including 2D vertical and 3D model-based
products. We continually strive to improve our product functionality and specialization by industry while
increasing product interoperability and usability. We are also considering innovative ways of delivering better
user experiences to the customers we serve. As a result, we drive technology democratization and increase
customer loyalty.
In addition, we believe that expanding our 2D horizontal product customers’ portfolios to include our 2D
vertical products and 3D model-based design products presents a meaningful growth opportunity and is an
important part of our overall strategy. For fiscal 2009, revenue from 3D model-based design products increased
23%, including a 38% increase in related maintenance revenue, as compared to the prior fiscal year. We shipped
approximately 142,000 commercial seats (which includes new seats and crossgrade seats) of 3D model-based
design products, including approximately 37,000 seats of Autodesk Inventor and Autodesk Moldflow, and
approximately 105,000 seats of our Architecture, Engineering and Construction products (Autodesk Revit,
AutoCAD Civil 3D, Autodesk Navisworks and Autodesk Robobat). We expect that the adoption of 2D vertical
products and 3D model-based design products will increase the productivity of our customers in all industries
and result in richer design data. This migration also poses various risks to us. In particular, if we do not
successfully expand our 2D horizontal customer base to our 2D vertical products and 3D model-based design
products as expected, then we would not realize the growth we expect and our business would be adversely
affected.
Expanding our geographic coverage is another key element of our growth strategy. We believe that
emerging economies continue to present long-term growth opportunities for us, although revenue from emerging
economies declined 31% for the fourth quarter of fiscal 2009 as compared to the same period of the prior fiscal
year. For all of fiscal 2009, revenue from emerging economies increased 14% as compared to fiscal 2008.
Revenue from emerging economies represented 18% of fiscal 2009 net revenue as compared to 17% of fiscal
2008 net revenue. While we believe there are long-term growth opportunities in emerging economies, conducting
business in these countries presents significant challenges, including the current economic contraction in those
countries, intellectual property protection and software piracy.
Our strategy includes improving our product functionality and expanding our product offerings through
internal development as well as through the acquisition of products, technology and businesses. Acquisitions
often increase the speed at which we can deliver product functionality to our customers; however, they entail
integration challenges and may, in certain instances, negatively impact our operating margins. We continually
review these trade-offs in making our decisions of whether to make acquisitions. The size and frequency of
transactions to acquire products, technology and businesses increased during fiscal 2009 and the second half of
fiscal 2008 as compared to earlier periods. We currently anticipate that we will selectively acquire products,
technology and businesses as compelling opportunities that promote our strategy become available, but the pace
at which we make such investments will vary depending upon our business needs, the availability of suitable
sellers and technology, and our own financial condition.
Global economic conditions deteriorated significantly during our fiscal year ended January 31, 2009.
Economic contraction in most countries and markets, and global financial market instability, including tighter
credit, is adversely impacting our business. We have seen demand for our products and services decline in each
of our major geographies and all the industries we serve, particularly during our most recent fiscal quarter that
ended on January 31, 2009. We have taken, and continue to take, actions to address these global economic
changes and how they are affecting our financial condition. Our strategy remains focused on leveraging our core
strengths and investing in our long-term growth opportunities to achieve our goal of being the world’s leading 2D
and 3D design and engineering software and services company for the architecture, engineering, and
construction, manufacturing, geospatial mapping, and digital media and entertainment markets.
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