Question-and-Answer Session
Operator
Thank you. (Operator Instructions) Your first question comes from Tom Ernst - Deutsche Bank Securities.
Tom Ernst - Deutsche Bank Securities
I think you said in your prepared remarks that contracting was down 10% from 2Q. My math suggests it was up over 10%. Did you misstate that or is my math wrong?
Robert A. Schriesheim
Your math's wrong.
Tom Ernst - Deutsche Bank Securities
Okay, I'll take that offline. The second question I had for you was I think you highlighted for us last quarter your intent to focus on a tighter range of verticals to bring a little more focus. It sounds like you did some of that during the quarter, perhaps consolidating some of your M3 verticals, as well as making some senior level sales changes. Can you highlight some of those changes you've gone through in the quarter and have you gone through this transformation at this point entirely now?
Harry Debes
The only senior change that we made the departure of Eduardo Sanchez, who was our EVP of Sales. As we said at the time, the change was not so much about his specific performance. He was a capable guy and we liked him, but frankly we needed to flatten the organization a little bit. And so especially in this recessionary time, that's what we decided to do.
In terms of the verticalization of the business, which is a process that's taking some time, we're down that road. A couple of our verticals - specifically health care, public sector, equipment service management - we've been operating as vertical business units for almost 12 months now in those sectors already.
In the future you'll see us also create dedicated teams for food, fashion and manufacturing and distribution. That really takes effect the first of June 2009.
Operator
Your next question comes from Peter Goldmacher - Cowen & Co.
Peter Goldmacher - Cowen & Co.
Harry, can you talk a little bit about what you're seeing as far as discounting? When you're going in to get these deals are you having to discount a little bit more or can you quantify sort of deal cycles, how much longer things are taking?
Harry Debes
Peter, on the first question, I don't think discounting is unusually high right now. I mean, people want good value. There's no question about it. But I think that discounting is marginal when you think about it from an overall cost of a deal. This company has a license fee, you know, changes the total cost of the project to a customer by 1% or 2%. And customers still will negotiate hard and look for good value, but ultimately when they choose a vendor it's a long-term commitment with lots of other costs that are attractive. So right now, even though you might expect that in this economy there'd be a lot of heavy discounting, we're not necessarily seeing an increase or a major change there.
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