Autodesk 2011 Annual Report Download - page 84

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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,
or our inability to rapidly adapt to technological and customer preference changes, including those related to
cloud computing, mobile devices, and new computing platforms, 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.
Our business could suffer as a result of risks, costs and charges associated with strategic acquisitions and
investments.
We regularly acquire or invest in businesses, software products and technologies that are complementary to
our business through acquisitions, strategic alliances or equity investments. The risks associated with such
acquisitions include, among others, the difficulty of assimilating products, operations and personnel, inheriting
liabilities such as intellectual property infringement claims, the failure to realize anticipated revenue and cost
projections, the requirement to test and assimilate the internal control processes of the acquired business in
accordance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, and the diversion of
management’s time and attention.
In addition, such acquisitions and investments involve other risks such as:
• the inability to retain customers, vendors, distributors, business partners, and other entities associated
with the acquired business;
• the potential impact on relationships with existing customers, vendors, distributors as business partners
as a result of acquiring another business;
• the potential that due diligence of the acquired business or product does not identify significant
problems;
• the potential for incompatible business cultures; and
• significant transaction or integration-related costs.
We may not be successful in overcoming such risks, and such acquisitions and investments may negatively
impact our business. In addition, such acquisitions and investments have in the past and may in the future
contribute to potential fluctuations in our quarterly financial results These fluctuations could arise from
transaction-related costs and charges associated with eliminating redundant expenses or write-offs of impaired
assets recorded in connection with acquisitions and investments. These costs or charges could negatively impact
our financial results for a given period, cause quarter to quarter variability in our financial results or negatively
impact our financial results for several future periods.
Because we derive a substantial portion of our net revenue from a small number of products, including our
AutoCAD-based software products, if these products are not successful, our net revenue will be adversely
affected.
We derive a substantial portion of our net revenue from sales of licenses of a small number of our products,
including AutoCAD software, products based on AutoCAD that serve specific vertical markets, upgrades to
those products and products that are interoperable with AutoCAD. Any factor adversely affecting sales of these
products, including the product release cycle, market acceptance, product competition, performance and
reliability, reputation, price competition, economic and market conditions and the availability of third-party
applications, would likely harm our financial results. During the fiscal year ended January 31, 2011, combined
revenue from our AutoCAD and AutoCAD LT products represented 33% of our consolidated net revenue.
18