Question-and-Answer Session
Operator
(Operator Instructions) For our first question we go to Srinivas Anantha- Oppenheimer & Co.
Srinivas Anantha- Oppenheimer & Co.
Could you guys talk about the competitive environment and maybe can you give us any color on pricing? That’s one. Second, where do you guys stand on your migration to the flat rate pricing model and given the macro environment we are in do you guys plan to accelerate on that strategy or is going to be the gradual migration of customers to that particular platform as you talked about previously?
Theodore P. Schrafft
First of all on the pricing trends, we are seeing pricing trends I think pretty consistent with historical trends. As I said I think we’re seeing consistency there, we’re seeing consistently all solutions, our markets are competitive and obviously we’ve been in competitive price areas for a while but again the trends the same.
What we like about, again I’m going to turn back, we like the diversity in our portfolio and what I mean by that diversity is I’m talking about the fact that we exist across three regions in Europe Asia Pac, North America and have the four solutions in the PGI COS portfolio. It just gives us a lot of diversity in our business model and therefore from our standpoint gives us health relative to pricing and pricing with customers, etc.
Anyway trends are the same and we like our business diversity. On the subscription and the movement toward revenue under contract, as we said before we have been and we’re going to stay very measured and deliberate in terms of our approach there. Again our goal overall is to improve the quality of every revenue dollar that we bring into this company in terms of moving it toward a consistent and predictable model as well as committed model.
We are working on marketing programs, sales programs, we’re getting some good traction as we said before in our SMB space, small mid-size business space. On the subscription based revenue we tend to see more revenue under contract as e move up market. Some of the numbers we’re seeing since the beginning of this year, 70% of the new deals we’re closing in SMB are under subscription.
Since the beginning of this year about 50% of the deals we’re closing in our larger markets have a revenue under contract component to them. Again, we’re going to be very measured, very deliberate in our movement there. But we love our strategy and our customers love the predictability of it so we’re positively moving forward. It’s going well.
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