Autodesk 2013 Annual Report Download - page 93

Further, given the rapid speed of changing customer expectations and advancement of technology inherent in the
software industry, the extensive and complex efforts required to create useful and widely accepted products and the rapid
evolution of cloud computing, mobile devices, new computing platforms and other technologies, such as consumer products,
our executive management team must act quickly, continuously and with vision. Although we have articulated a strategy that
we believe will fulfill these challenges, if we fail to execute properly on that strategy, adapt that strategy as market conditions
evolve or fail to internalize and execute on that strategy, we may fail to meet our customers' expectations, fail to compete with
our competitors' products and technology and lose the confidence of our channel partners and employees. This in turn could
adversely affect our business and financial performance.
From time to time we realign or introduce new business and sales initiatives; if we fail to successfully execute and manage
these initiatives, our results of operations could be negatively impacted.
As part of our effort to accommodate our customers' needs and demands and the rapid evolution of technology, we from
time to time evolve our business and sales initiatives such as realigning our development and marketing organizations, and
expanding our portfolio of suites and our offering of software as a service, and realigning our internal resources in an effort to
improve efficiency. Specifically, last year we undertook organizational changes in order to address major business initiatives,
including our desire to accelerate our move to the cloud, transform our customers' experience, increase industry focus to meet
customer demands, and develop more effective marketing. These reorganizational efforts included changes to the structure and
alignment of our product development and marketing teams and re-organization of our sales teams by industry. We may take
such actions without clear indications that they will prove successful, and at times, we have been met with short-term
challenges in the execution of such initiatives. Market acceptance of any new business or sales initiative is dependent on our
ability to match our customers' needs at the right time and price. Often we have limited prior experience and operating history
in these new areas of emphasis. If any of our assumptions about expenses, revenue or revenue recognition principles from these
initiatives proves incorrect, or our attempts to improve efficiency are not successful, our actual results may vary materially
from those anticipated, and our financial results will be negatively impacted.
Because we derive a substantial portion of our net revenue from a small number of products, including our AutoCAD-based
software products including suites, if these products are not successful, our revenue will be adversely affected.
We derive a substantial portion of our net revenue from sales of licenses of a limited number of our products, including
AutoCAD software, products based on AutoCAD, which includes our suites that serve specific 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, 2013, combined revenue from our AutoCAD and AutoCAD LT products, not including suites
having AutoCAD or AutoCAD LT as a component, represented 33% of our total net revenue.
A breach of security in our products or computer systems may compromise the integrity of our products, harm our reputation,
create additional liability and adversely impact our financial results.
We make significant efforts to maintain the security and integrity of our product source code and computer systems. The
risk of a security breach or disruption, particularly through cyber attack or cyber intrusion, including by computer hackers,
foreign governments and cyber terrorists, has increased as the number, intensity and sophistication of attempted attacks and
intrusions from around the world have increased. These threats include identity theft, unauthorized access, DNS attacks,
wireless network attacks, viruses and worms, advanced persistent threat (APT), application centric attacks, peer-to-peer attacks,
phishing, backdoor trojans and distributed denial of service (DDoS) attacks. Any of the foregoing could attack our products
and computer systems. Despite significant efforts to create security barriers to such programs, it is virtually impossible for us to
entirely eliminate this risk. Like all software products, our software is vulnerable to such cyber attacks. In the past, hackers
have targeted our software, and they may do so in the future. The impact of cyber attacks could disrupt the proper functioning
of our software products, cause errors in the output of our customers' work, allow unauthorized access to sensitive, proprietary
or confidential information of ours or our customers, and other destructive outcomes. Moreover, as we continue to invest in
new lines of consumer products and services we are exposed to increased security risks and the potential for unauthorized
access to, or improper use of, the information of our consumer users. If any of the foregoing were to occur, our reputation may
suffer, customers may stop buying our products, we could face lawsuits and potential liability, and our financial performance
could be negatively impacted.
We rely on third-parties to provide us with a number of operational services, including hosting and delivery, certain of our
customer services and other operations; any interruption or delay in service from these third parties, breaches of security or
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2013 Annual Report