Question-and-Answer Session
Operator
(Operator Instructions) Our first question or comment comes from the line of Mr. Simon Flannery from Morgan Stanley; your line is open.
Simon Flannery - Morgan Stanley
Okay, thank you very much. Good morning. The very good cost performance this quarter; can you just drill a little bit more down into the big drivers of the gross margin and what we should expect sequentially in terms of costs given your higher EBITDA guidance? Then secondly, I have been lot and pressed about proliferation and about dark pools. Can you just give some sense of what you think is that should be expected on Washington and the impact of the business?
Greg Freiberg
Hi, Simon, It’s Greg. Let me take the first part of that. We’re extremely proud on the cost performance here, which driven there is on the gross margin side. We’ve been really good and Phil hit on this theme, which is we’re managing this business for the performance on it. We’ve been really good at taking out the cost and costs of good side.
I had a benefit on the utility side that I did not see the seasonal cost increase that I normally would have. Jeff has just done a fabulous job putting rigger into cost of operations organization and that’s reflective on the EBITDA guidance we gave going forward as well.
The other comment I’d make is on the SG&A. It is up a little sequentially from the second quarter to third quarter and this is a conscious decision on our part, really investing on the innovation and product development here into the Cloud storage, because those are necessary investments to get a very robust product platform work for us on the revenue opportunity.
Simon Flannery - Morgan Stanley
Was the utility cost benefit, was it a pricing or was it more that it wasn’t as hard to say didn’t have as much usage?
Greg Freiberg
Utility cost is benefit there.
Simon Flannery - Morgan Stanley
Okay.
Phil Koen
Simon, I’m going to have Bill to talk to the proliferation dark pools question that you raised.
Simon Flannery - Morgan Stanley
Thank you.
Bill Fathers
Thanks, Simon. So I think the first on say is that we’re not seeing the current regulatory discussions having an impact on demand for the services we offer, the infrastructure supporting the needs of those customers.
So, I guess the second point would be what do we foresee this impact demand anyway of no strong view one way or the other and I can see on the positive side, the potential specter of starting to regulate the provision of Colocation services by exchanges may drive improved demand for then you mutual clouds like SAVVIS and not to do it themselves.
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