Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Aaron C. Rakers - Stifel Nicolaus & Co.
Aaron C. Rakers - Stifel Nicolaus & Co.
First, a housekeeping question. Net App and Dell Contributions, I think actually surpasses 10% of revenue over the last few quarters, so it would be helpful to just get those two customers as a percent of your NSS segment.
Richard Pearce
For the first time, actually relatively pleasing in some ways, is Net App is actually slightly under the 50% of the revenue in the NSS business. In terms of Dell, you're right, that has been over a 10% customer now for the last couple of quarters and we prefer not to give specific revenues per customer as we go forward but between Dell and IBM, which are two of our newer customers our ramping referred to, they're approximately 30% of our revenues between those two customers.
Aaron C. Rakers - Stifel Nicolaus & Co.
And can you talk a little about the gross margin profile here as we move forward. Obviously solid job on both segments and I guess I'm just trying to understand, her as we move forward, are those sustainable levels for both segments, moving forward?
Richard Pearce
On the SI side of the business, and I think in keeping with our comments of the last quarter, it was our expectation that margins would be back to the 30%-type levels at this type of revenue level. And they would be expected margin profiles that we've given going forward and we still feel comfortable with those. Obviously, within quarters there will be certain product mixes which could take it slightly below or slightly above the 30% region, but we're happy with that from the SI perspective.
On the NSS side of the business, I think at the last call we were forecasting margins in that business on a sort of medium-term basis to be between 12% and 13%. I think that was slightly increased from where we previously looked on the longer term, 11% to 12% a couple of quarters back. I still think, again in the sort of medium term, a 12% to 13% profile is appropriate.
We have made some good advances this quarter in terms of operational efficiencies and that's come both with the benefits that we are starting to get now from the SAP system, which went into full utilization about a year ago and some initial issues, which we did expect, which took those expenses up a little bit.
- To read the full transcript on Seeking Alpha, click here »
