Question-and-Answer Session
Operator
Thank you. (Operator Instructions). Our first question comes from Joseph Foresi. Question, sir.
Joseph Foresi - Janney Montgomery Scott
Hi guys, I know you talked about this on the earlier call, but so I wondered if you could briefly discuss the demand environment heading in to 2008, specifically in reference to discretionary spending and what you are seeing on that front?
Girish Paranjpe
Hi, Girish here. With most of our clients, the budgeting process is currently on. But we have some sense based on what has gone in so far in to the first proposal for budget making, and some feedback on that. So, broadly we are seeing a neutral budget for 2008, which is in some ways remarkable, given the growth in IT budget that has taken place over the last two years for many of our clients.
So, given the fact that there is no major change in the IT spend level, I would imagine that the level of discretionary spend would remain more or less similar, but we'll get a better sense, maybe a month or two down the line, once the budget have been signed off.
Joseph Foresi - Janney Montgomery Scott
By neutral, do you mean flat, with what you saw last year?
Girish Paranjpe
Yeah. Flat as compared to last year.
Joseph Foresi - Janney Montgomery Scott
And just sort of switching gears, I know obviously with the Infocrossing acquisition, that you are doing sort of an asset intensive approach to infrastructure services. Some of your competitors do asset [Light]. I wonder, if you could give us a little more color on why you decided to take that type of path?
Zach Lonstein
If you don’t mind, this is Zach Lonstein. I would like just to take that question. As a matter of fact, [you and I have been listening to all this], In fact it's just the opposite. We have five data --
Sridhar Ramasubbu
Rajesh, I think Zach's voice is not clear, maybe he has to pickup the phone, but it is in a conference room, we are not able to hear very clearly.
Zach Lonstein
Can you hear me now?
Sridhar Ramasubbu
Little better, but still your voice is little bit echoing.
Zach Lonstein
How about on this line?
Sridhar Ramasubbu
Slightly better.
Zach Lonstein
We have a very asset light business model. We have two main lines of business within our data center. One is of (inaudible), in which variably, we bring our client servers into our data centers, we do not provide the servers. And the other, it is that Mainframe systems, in which while we do provide the Mainframes. Mainframe is their sheer existence. So the CapEx component is very [tiny].
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