Autodesk 2011 Annual Report Download - page 74

MARKETING AND SALES
We license or sell our products and services globally, primarily through indirect channels consisting of
distributors and resellers. To a lesser extent we also transact directly with customers who are primarily large
corporations. Our indirect channel model includes both a two-tiered distribution structure, where distributors sell
to resellers, and a one-tiered structure, where Autodesk sells directly to resellers. We have a network of
approximately 2,000 resellers and distributors worldwide. For fiscal 2011, approximately 85% of our revenue
was derived from indirect channel sales through distributors and resellers, and we expect that the majority of our
revenue will continue to be derived from indirect channel sales in the future. We employ a variety of incentive
programs and promotions to align our reseller channel with our business strategies. Sales through Tech Data
Corporation and its affiliates accounted for 16%, 14% and 14% of our net revenue for fiscal years 2011, 2010
and 2009, respectively. We believe our business is not substantially dependent on Tech Data. Our actual
customers through Tech Data are the resellers and end users who purchase our software licenses and services.
Should any of the agreements between us and Tech Data be terminated for any reason, we believe that
arrangements could be made so that the resellers and end users who currently purchase our products through
Tech Data would be able to continue to do so under substantially the same terms from one of our many other
distributors without substantial disruption to us. No other distributor or reseller accounted for 10% or more of our
revenue.
Our customer-related operations are divided into three geographic regions, the Americas; Europe, Middle
East and Africa (“EMEA”); and Asia Pacific (“APAC”). Each geographic region is supported by global
marketing and sales organizations. These organizations develop and manage overall marketing and sales
programs and work closely with a network of domestic and international sales offices. Fiscal 2011 net revenue in
the Americas, EMEA and APAC was $701.5 million, $782.8 million and $467.5 million, respectively. 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 total net revenue. Adverse economic conditions in the countries that contribute a
significant portion of our net revenue may have an adverse effect on our business in those countries and our
overall financial performance. A summary of our financial information by geographic location is found in Note
13, “Segments,” in the Notes to Consolidated Financial Statements. Our international operations and sales
subject us to a variety of risks; see Item 1A, “Risk Factors,” for further discussion.
We also work directly with reseller and distributor sales organizations, computer manufacturers, other
software developers and peripherals manufacturers in cooperative advertising, promotions and trade-show
presentations. We employ mass-marketing techniques such as Web casts, seminars, telemarketing, direct
mailings, advertising in business and trade journals and social media. We have a worldwide user group
organization and we have created online user communities dedicated to the exchange of information related to
the use of our products.
In addition to sales of new software licenses, we generate revenue through our maintenance program and
upgrade pricing options. These choices are available for a majority of our products and offer our customers two
alternative means of migrating to the most recent version of our products.
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
Operations and is referred to throughout this document as maintenance revenue.
Upgrade pricing offers customers who are not on our maintenance program an opportunity to purchase
upgrades to the most current version of the same product at current available prices, but only to the extent that
they are still on an Autodesk-supported version of our product. An existing customer, whether or not on
maintenance, also has the option to upgrade, for a premium fee, to a different, vertical or model-based design
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