Autodesk 2009 Annual Report Download - page 87

Under the maintenance program, known by our user community as the Autodesk Subscription Program,
customers who own a perpetual use license for the most recent version of the underlying product are able to
purchase maintenance that provides them with unspecified upgrades when-and-if-available and are able to
download e-Learning courses and receive online support over a one year or multi-year maintenance service
period. Revenue from our maintenance program is reported separately on our Consolidated Statements of Income
and is referred to throughout this document as maintenance revenue.
The Autodesk upgrade program allows customers who are not on the maintenance program to purchase
upgrades, but only to the extent that they are still on an Autodesk-supported version of the product. Typically, the
cost to upgrade is based on a multiple of the number of versions the customer is upgrading. An existing customer
also has the option to upgrade, for a premium fee, to a different, industry-specific or 3D product, which generally
has a higher price; we refer to this as a crossgrade. The cost of a crossgrade is substantially less than the cost of
purchasing a new license and is available to maintenance customers as well. Revenue from our upgrade and
crossgrade programs is reported on our Consolidated Statements of Income in “License and other.” Our ability to
effectively distribute our products depends in part upon the financial and business condition of our distributor
and reseller networks. Computer software resellers and distributors are typically not highly capitalized. As a
result, they have historically experienced difficulties during times of economic contraction and are experiencing
difficulties in the current economic environment. While we have processes to ensure that we assess the
creditworthiness of resellers and distributors prior to selling to them, if their financial condition were to
deteriorate further 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 resellers could harm our business. Our
reliance on distributors and resellers subjects us to other risks; see Item 1A, “Risk Factors,” for further
discussion.
We intend to continue to make our products available in foreign languages. We believe that international
sales will continue to comprise the majority of our net revenue. Economic weakness in countries where we
generate a significant portion of our net revenue, including the U.S., has had, and could in the future have, an
adverse effect on our business. A summary of our financial information by geographic location is found in Note
11, “Segments” in the Notes to Consolidated Financial Statements.
CUSTOMER AND RESELLER SUPPORT
We provide technical support and training to customers through a leveraged support model, augmented by
direct programs designed to address certain specific needs. Our customers rely primarily on the resellers and
distributors from which they purchased licenses to our products for technical support; however, we do provide
certain direct support for some of our customers. We support our resellers and distributors through technical
product training, sales training classes, the Internet and telephone. We also provide online support directly to our
customers through our maintenance program. There are also a number of user group forums in which customers
are able to share information.
EDUCATIONAL PROGRAMS
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. Users trained on our products are broadly available both from educational institutions and the existing
workforce, reducing the cost of training for our customers.
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 solutions for a wide variety of highly specific uses. We offer
several programs that provide marketing, sales, technical support and programming tools to developers who
9