Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Brian Alexander - Raymond James.
Brian Alexander - Raymond James
Thanks and good afternoon everybody. Could you guys just provide a little bit more detail on the Q4 earnings guidance, specifically, how do we get just flat earnings sequentially. I understand that your tax rate may be going back up and that provides a little bit of a headwind, you talked about, Tony, I think that you are not going to see as much seasonality in the software business, as you would typically see.
So may be expand on that point, how much below seasonality do you think the software business will be and what is driving that particularly as we have some new software from your major publisher in that business and then I guess just layering onto the earnings progression from Q3 to Q4, how much of that is additional gross margin we missed in your key segments, thanks.
Glynis Bryan
So Brian, I guess addressing your point, you are right, we have a couple of headwinds coming from the tax rate impact, I can’t give you a precise percentage with regard to the reduction that we will see on a quarter of a quarter basis, as it relates year over year basis, as it relates to software, but the reduction that we are talking about there is related to the program changes that we discussed and have discussed in each quarter, that when it will affect the beginning of May of this year.
So the impact in Q2 and Q4 are typically, will be typically larger than the impact of Q3 only because Q2 and Q4 and typically larger software quarters, but our Q4 quarter historically has not been trending a stronger outlook as of second quarter.
The other piece I guess, in terms of the reference I think to Windows 7 that you made, that’s not something that’s going to impact corporates in the near term with the lease that just came out. I don’t think that we are envisioning that there’s going to be an impact on the corporate segment specifically large enterprise segments, the second half of 2010 maybe going into 2011, and that historically is related to the fact that large corporates usually are late adopters after the first iteration of the changes have gone through, the publisher one.
Then also access to Windows 7 is actually embedded in the large enterprise agreements, so they can upgrade to Windows 7 in the large enterprise agreements without actually having to buy it, so there’s not going to be an incremental revenue flow in the large segment of our business coming from that.
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