Autodesk 2015 Annual Report Download - page 101

2015 Form 10-K 9
the significant costs and challenges, including intellectual property protection, against the benefits of our international
development activities.
In addition, our business and our customers benefit from our relationships with a network of over 4,000 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 a select set of 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 2,200 resellers and distributors
worldwide. For fiscal 2015, approximately 83% 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 anticipate that our channel mix will change to support our new business model and plan to proactively work with our
channel partners to ensure a smooth transition. 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 25%, 24%, and 23% of our net revenue for fiscal years 2015, 2014, and 2013, respectively. We believe our business is not
substantially dependent on Tech Data. 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, reseller, or direct customer 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 2015 net revenue in the Americas, EMEA, and APAC was $898.0 million (36%), $980.0
million (39%), and $634.2 million (25%), 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 and currency exchange rates in the countries that contribute a significant portion of our net revenue, including
emerging economies, 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, sponsorships, 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 perpetual use software licenses, we generate revenue through several subscription-based
business models. The largest is our maintenance program, under which 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. We also offer more flexible term-based license offerings to our customers.
Our ability to effectively distribute our products depends in part upon the financial and business condition of our
distributor and reseller networks. The loss of, or a significant reduction in, business with any one of our major distributors or
large resellers could harm our business; see Item 1A, “Risk Factors,” for further discussion.
2015 Annual Report