Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from Jeffrey Kvall – Barclays Capital.
Jeffrey Kvall – Barclays Capital
I want to ask you a little bit about the pipeline of business. It sounds as though if things do continue to progress for you but at the same time guidance is coming down, so could you help us reconcile those two?
Dominic Orr
The pipeline continues to be very strong and also we are several weeks into November of Q2 now and there is actually nothing unusual about booking trends. However, having experienced what we have experienced in January and February earlier this calendar year, we seriously believe that the budget cycle for the mixed calendar year for a lot of enterprises would take a decline, so I believe that the CIO and therefore IT budgets probably will not get finalized until pretty late part of the first calendar quarter in the March/April time frame and therefore we are taking a very, very cautious view of the month of January.
Jeffrey Kvall – Barclays Capital
So essentially the point there is that things should be fine through the balance of the year but the '09 budget there's little visibility there.
Dominic Orr
We feel the pipeline is strong. Competitively we're gaining strength against particularly the smaller competitors. We're standing a win rate against our major competitor's remains very strong. So if they spend, we can capture it. The question is, in the month of January, will they spend and we don't really have the answer to that any better than the other companies.
Jeffrey Kvall – Barclays Capital
On the OpEx side of things, you're expecting the OpEx to get to the $30 million plus range by say the middle of next year?
Steffan Tomlinson
We don't give guidance specifically on OpEx, but what we have done is put in a cost reduction effort that spans both production and work force and discretionary items that we highlighted, travel, marketing and other programs. So we want to basically be right sizing the company to ensure that we can have operating leverage growth throughout the rest of the year.
Dominic Orr
The fact that our bookings in the month of September and the month of October were showing year over year growth shows that in this depressed economic environment our value proposition is showing through. So again, if our customers spend on IT budgets we actually have confidence that we can get our share. It is just that beyond December when we get into January we really do not know whether people do have money to spend.
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