Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Kathryn Huberty – Morgan Stanley.
Kathryn Huberty – Morgan Stanley
I understand that near term visibility is low but we’ve now seen customers delay or slow spend for several quarters so just logically I’d curious what your thoughts are around how long companies can put off these projects just given how imperative this data is to running their businesses and making smart business decisions?
James P. Baum
I think from our sense what we’re seeing in the climate out there is I think during the first quarter we saw a fairly large number of transactions slip from Q1 into the future. In some cases that future is somewhat indeterminate but in most cases, in fact the vast majority of them they’re not transactions that have gone away so we look at that as a leading indicator. They’re not killed projects but projects that have been deferred.
I don’t think that our pipeline shows the data right now to support this statement but we do hear some anecdotal statements coming back from the field that say there appears to be kind of an uptick in activity in the back half of the year. Like I said, I couldn’t prove that to you quantitatively right now but qualitatively we are hearing that.
Patrick J. Scannell, Jr.
But, let me add to that and that is that as you know the base line of our business is the compelling need the customers have to fix a burning problem that they have or something that’s on fire that they have. So, even when we look at the 14 new customers as well as the repeat customers they’ve got this critical need and this problem and it’s a question of where this gets prioritized in the stack. We’ve heard that for those that are buying, it gets prioritized pretty high up in the stack. As Jim said, we do have some evidence that the back half of this year that this trend looks more favorable.
Kathryn Huberty – Morgan Stanley
Then, do you feel like you need IT budgets to really loosen up to reaccelerate revenue growth or are there other scenarios whether it be new products coming to market, new distribution channels that could allow you to reaccelerate growth earlier than the overall IT market?
James P. Baum
My sense is that as we look through the rest of this year our revenue will come largely through our additional channels, through our direct sales force and that direct sales force as you know is dependent on IT budgets. So, I think as we look forward sort of through the near term and the rest of the year, we don’t see any big changes in the selling model. We do have new products coming later in the year but they will be products that will be datacenter oriented products that address similar products to those that we address with the current product line.
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