Autodesk 2015 Annual Report Download - page 103

2015 Form 10-K 11
versions of existing products that offer compelling efficiencies for our customers. We also compete through investments in
marketing and sales to more effectively reach new customers and better serve existing customers.
Our competitors include large, global, publicly traded companies; small, geographically focused firms; startup firms; and
solutions produced in-house by their users. Our primary global competitors in the PSEB, AEC, and MFG segments include
Adobe Systems Incorporated, ANSYS, Inc., AVEVA Group plc, Bentley Systems, Incorporated, Dassault Systèmes S.A. and its
subsidiary Dassault Systèmes SolidWorks Corp., Environmental Systems Research Institute, Inc. (ESRI), Intergraph
Corporation, a wholly owned subsidiary of Hexagon AB, MSC Software Corporation, Nemetschek AG, PTC, 3D Systems,
Seimens PLM, and Trimble Navigation Limited.
Our M&E segment also competes with a wide range of different companies from large, global, publicly-traded companies
to small private entities. Large organizations that produce products that compete in some or all of our markets include Adobe
Systems Incorporated, Apple Inc., Avid Technology, Inc., SONY Corporation, and Technicolor, among others. The media and
entertainment market is highly fragmented with complex interdependencies between many of the larger businesses. As a result,
some of our competitors also own subsidiaries that are our customers or our partners in developing or bringing to market some
of our solutions. In addition to traditional competitors in developed economies, we encounter new competitors in emerging
economies.
The software industry has limited barriers to entry, and the availability of computing power with continually expanding
performance at progressively lower prices contributes to the ease of market entry. The industry is presently undergoing a
platform shift from the personal computer to cloud and mobile computing. This shift further lowers barriers to entry and poses a
disruptive challenge to established software companies. The design software market is characterized by vigorous competition in
each of the vertical markets in which we compete, both from existing competitors and by entry of new competitors with
innovative technologies. Competition is increasingly enhanced by consolidation of companies with complementary products
and technologies and the possibility that competitors in one vertical segment may enter other vertical segments that we serve. In
addition, some of our competitors in certain markets have greater financial, technical, sales and marketing, and other resources
than we do. Because of these and other factors, competitive conditions in these industries are likely to continue to intensify in
the future. Increased competition could result in price reductions, reduced net revenue and profit margins, and loss of market
share, any of which could harm our business. See Item 1A, “Risk Factors,” for further discussion of risks regarding
competition.
We believe that our future results depend largely upon our ability to better serve customers by offering new products,
including cloud and mobile computing products, whether by internal development or acquisition, and to continue to provide
existing product offerings that compete favorably with respect to ease of use, reliability, performance, range of useful features,
continuing product enhancements, reputation, price, and training.
INTELLECTUAL PROPERTY AND LICENSES
We maintain an active program to legally protect our investment in technology through intellectual property rights. We
protect our intellectual property through a combination of patent, copyright, trademark and trade secret protections,
confidentiality procedures, and contractual provisions. The nature and extent of legal protection associated with each such
intellectual property right depends on, among other things, the type of intellectual property right and the given jurisdiction in
which such right arises. We believe that our intellectual property rights are valuable and important to our business, including
each of our segments.
Nonetheless, our intellectual property rights may not be successfully asserted in the future or may be invalidated,
circumvented or challenged. In addition, the laws and enforcement of the laws of various foreign countries where our products
are distributed do not protect our intellectual property rights to the same extent as U.S. laws. Enforcement of intellectual
property rights against alleged infringers can sometimes lead to costly litigation and counterclaims. Our inability to protect our
proprietary information could harm our business.
From time to time, we receive claims alleging infringement of a third party’s intellectual property rights, including
patents. Disputes involving our intellectual property rights or those of another party have in the past and may in the future lead
to, among other things, costly litigation or product shipment delays, which could harm our business.
We retain ownership of software we develop. Desktop software is licensed to users pursuant to ‘click through’ or signed
license agreements containing restrictions on duplication, disclosure, and transfer. Cloud software and associated services are
provided to users pursuant to on-line or signed terms of service agreements containing restrictions on access and use.
2015 Annual Report