Autodesk 2012 Annual Report Download - page 76

In addition, our business and our customers benefit from our relationships with a network of over 3,600 third-party
developers who develop and sell their own products that further enhance the range of integrated solutions available to our
customers.
For further discussion regarding risks from our product development and introduction efforts, see Item 1A, “Risk
Factors.”
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
2012, approximately 84% 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 our
largest distributor, Tech Data Corporation and its affiliates, accounted for 17%, 16% and 14% of our net revenue for fiscal years
2012, 2011 and 2010, respectively. On October 27, 2011, Tech Data purchased certain assets of Mensch and Maschine Software
(“MuM”), which has been a distributor of our products in Europe. The acquisition concentrates additional sales through Tech
Data, which on a consolidated basis would have accounted for 21%, 22% and 21% of our net revenue for fiscal years 2012,
2011 and 2010, if the acquisition had taken place at the beginning of fiscal 2010. We believe our business is not substantially
dependent on Tech Data, including following the acquisition of certain assets of MuM. Our 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 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 our revenue. 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 2012 net revenue in the Americas, EMEA and APAC was $798.5 million, $862.2 million
and $554.9 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 webcasts, 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 for an incremental fee at current available prices, but only to the extent that they are
still on an Autodesk-supported version of our product. An upgrade also includes a crossgrade where a customer pays an
incremental fee at currently available prices toward the purchase of a different product, which generally has a higher price. The
cost of an upgrade is less than the cost of purchasing a new license. During fiscal 2012, customers could upgrade from software
that is three versions prior to the latest version available or newer at a percentage of a full license; the license of the previous
version of the product is terminated. Revenue from upgrades are reported on our Consolidated Statements of Operations in
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“License and other.”