Question-and-Answer Session
Operator
(Operator Instructions). Our first question will come from the line of Rich Valera with Needham and Company.
Rich Valera – Needham and Company
Aart, just wanted to ask a question on the bookings front. You mentioned that booking were a little lighter than expected in the quarter. I know last quarter you had mentioned you were still seeing some increasing run rates on your renewals. I just wanted to get your sense of what was it that caused the light bookings in the quarter. Was it lower run rate renewals or was it just some companies deferring their actual orders into future periods?
Aart de Geus
Rich, it was clearly the second. The run rates are flattish. The reason people tend to renew sluggishly, if that’s the word, is that they’re clearly not having much visibility themselves, and so what I expect will continue to happen over the next many quarters is that people are just gradually going to drift more towards the end of the contracts because at this point in time making no decision is often easier than making any decision.
Rich Valera – Needham and Company
With respect to the duration, which was the lowest seen in quite a while, do you think there’s anything to that? Do you think customers are less willing to make long-term commitments now, or is this just noise in the statistics?
Aart de Geus
I think it’s mostly noise, although I think you’re still aiming at a very interesting question because I think that we’re going to see more binary behavior, meaning that we clearly see some customers that want to do business with us and that are banking on us wanting to actually at times do longer deals whereas people that are not sure will just try to minimize any decision they have to make, and so I think the sample set was not all that relevant in this case, but nonetheless, I think it’s not indicative of a major trend yet.
Rich Valera – Needham and Company
Last quarter, you gave us a qualitative bookings guidance that you expected book to bill to be slightly less than 1 to 1 for the year. Would you care to update that? Presumably maybe you would expect it to be slightly weaker than that. I don’t know if you’d be willing to add any color to that previous guidance.
Aart de Geus
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