Autodesk 2010 Annual Report Download - page 113

In addition, we anticipate that our international operations will continue to account for a significant portion of
our net revenue, and as we expand our international development, sales and marketing expertise, will provide
significant support to our overall efforts in countries outside of the U.S. Risks inherent in our international
operations include fluctuating currency exchange rates, including risks related to any hedging activities we
undertake, unexpected changes in regulatory requirements and practices, delays resulting from difficulty in
obtaining export licenses for certain technology, tariffs, quotas and other trade barriers and restrictions,
transportation delays, operating in locations with a higher incidence of corruption and fraudulent business practices,
difficulties in staffing and managing foreign sales and development operations, longer collection cycles for accounts
receivable, potential changes in tax laws, tax arrangements with foreign governments and laws regarding the
management of data, possible future limitations upon foreign owned businesses, increased financial accounting and
reporting burdens and complexities, inadequate local infrastructure, greater difficulty in protecting intellectual
property, and other factors beyond our control, including terrorism, war, natural disasters and diseases.
Existing and increased competition may reduce our net revenue and profits.
The software industry has limited barriers to entry, and the availability of desktop computers with
continually expanding performance at progressively lower prices contributes to the ease of market entry. The
markets in which we compete are characterized by vigorous competition, both by entry of competitors with
innovative technologies and by consolidation of companies with complementary products and technologies. In
addition, some of our competitors in certain markets have greater financial, technical, sales and marketing and
other resources. Furthermore, a reduction in the number and availability of compatible third-party applications
may adversely affect the sale of our products. Because of these and other factors, competitive conditions in the
industry are likely to intensify in the future. Increased competition could result in continued price reductions,
reduced net revenue and profit margins and loss of market share, any of which would likely harm our business.
We believe that our future results depend largely upon our ability to offer products that compete favorably
with respect to reliability, performance, ease of use, range of useful features, continuing product enhancements,
reputation and price.
If we are not able to adequately protect our proprietary rights, our business could be harmed.
We rely on a combination of patent, copyright and trademark laws, trade secret protections, confidentiality
procedures and contractual provisions to protect our proprietary rights. Despite such efforts to protect our
proprietary rights, unauthorized parties from time to time have copied aspects of our software products or have
obtained and used information that we regard as proprietary. Policing unauthorized use of our software products
is time-consuming and costly. While we have recovered some revenue resulting from the unauthorized use of our
software products, we are unable to measure the extent to which piracy of our software products exists and
software piracy can be expected to be a persistent problem. Furthermore, our means of protecting our proprietary
rights may not be adequate.
Additionally, we actively protect the secrecy of our confidential information and trade secrets, including our
source code. If unauthorized disclosure of our source code occurs, we could potentially lose future trade secret
protection for that source code. The loss of future trade secret protection could make it easier for third-parties to
compete with our products by copying functionality, which could adversely affect our financial performance and
our reputation. We also seek to protect our confidential information and trade secrets through the use of
non-disclosure agreements with our customers, contractors, vendors, and partners. However it is possible that our
confidential information and trade secrets may be disclosed or published without our authorization. If this were
to occur, it may be difficult and/or costly for us to enforce our rights, and our financial performance and
reputation could be negatively impacted.
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