Autodesk 2015 Annual Report Download - page 127

2015 Form 10-K 35
Over the next three years, we expect to increase our subscription base and customer value, which we believe will help
drive billings growth. During the transition, revenue, deferred revenue, operating margin, and earnings per share will be
affected as more revenue is recognized ratably rather than up front and as new offerings bring a wider variety of price points.
For fiscal 2015, our billings increased 18%, as compared to the prior fiscal year. The difference between our 10% year-
over-year growth in revenue and our 18% year-over-year growth in billings represents 8 percentage points from the increase in
deferred revenue, primarily driven by an increase in subscription billings over the past fiscal year and the business model
transition.
At January 31, 2015 and January 31, 2014, our total subscriptions were 2.23 million and 1.85 million, respectively.
Subscription additions were led by maintenance subscriptions and benefited from promotional activity driving upgrades and
maintenance renewals.
For the past three years, suites have been an important growth area to our overall strategy. As our customers in all
industries adopt our design suites, we believe they will experience an increase in their productivity and the value of their design
data. For fiscal 2015, revenue from suites increased 17%, as compared to the prior fiscal year. As a percentage of revenue,
suites increased to 36% in fiscal 2015 as compared to 34% in fiscal 2014.
Another key element of our growth strategy is increasing our global penetration. Much of the growth in the world’s
construction and manufacturing is happening in emerging economies. Further, emerging economies face many of the challenges
that our design technology can help address, including infrastructure build-out and innovative design and manufacturing. In
fiscal 2015, revenue from emerging economies increased 14% as compared to fiscal 2014 and represented 15% of net revenue
for both fiscal 2015 and fiscal 2014. While we continue to believe there are long-term growth opportunities in emerging
economies, conducting business in these countries presents significant challenges, including economic volatility, geopolitical
risk, local competition, limited intellectual property protection, poorly developed business infrastructure, scarcity of talent,
software piracy, and different purchase patterns as compared to the developed world.
Today, complex challenges such as globalization, urbanization, and sustainable design are driving our customers to new
levels of performance and competitiveness, and we are committed to helping them address those challenges and take advantage
of new opportunities. To achieve these goals, we are capitalizing on two of our strongest competitive advantages: our ability to
bring advanced technology to mainstream markets, and the breadth and depth of our product portfolio.
We bring powerful new design capabilities to volume markets. Our products are designed to be easy-to-learn and use, and
to provide customers with a low cost of deployment, a low total cost of access to our software offerings, and a rapid return on
investment. In addition, our software architecture allows for extensibility and integration with other products. The breadth of
our technology and product line gives us a unique competitive advantage, because it allows our customers to address a wide
variety of problems in ways that transcend industry and disciplinary boundaries. This is particularly important in helping our
customers address the complex challenges mentioned above. We also believe that our technological leadership and global brand
recognition have positioned us well for long-term growth and industry leadership.
In addition to the competitive advantages afforded by our technology, our large global network of distributors, resellers,
third-party developers, customers, educational institutions, educators, and students is a key competitive advantage. This
network of partners and relationships provides us with a broad and deep reach into volume markets around the world. Our
distributor and reseller network is extensive and provides our customers with the resources to purchase, deploy, learn, and
support our products quickly and easily. We have a significant number of registered third-party developers who create products
that work well with our products and extend them for a variety of specialized applications.
Autodesk is committed to helping fuel a lifelong passion for design in students of all ages. In fiscal 2014, we initiated a
new program offering free educational licenses of Autodesk software worldwide to students, educators, and educational
institutions. Targeting both the secondary and postsecondary school markets, we collaborate with educators, institutions and
partners that encourage design learning and further Science, Technology, Engineering, Digital Arts, and Math (STEAM)
education initiatives. Our intention is to make Autodesk software the ubiquitous design software of choice for those poised to
become the next generation of professional users.
Our strategy includes improving our product functionality and expanding our product offerings through internal
development as well as through the acquisition of products, technology, and businesses. Acquisitions often increase the speed at
which we can deliver product functionality to our customers; however, they entail cost and integration challenges and may, in
certain instances, negatively impact our operating margins. We continually review these trade-offs in making decisions
2015 Annual Report