Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Matt Petkun - D.A. Davidson & Co.
Matt Petkun - D.A. Davidson & Co.
On the new and merging side Greg or Wally, I think Wally you had mentioned that the Flomerics’ business was starting to go kick in. Wouldn’t that have contributed to a better quarter in that segment?
Walden Rhines
It’s true, but new and emerging contains a lot of categories so the principal cause is, I’m sorry.
Greg Hinckley
It’s with our PCB product, Wally.
Walden Rhines
So, I answered the wrong question. Right, so the answer is true. The mechanical analysis products are included in integrated systems design. Let me also note as long as I was there that’s the new and emerging weakness side that you mentioned as Greg noted was primarily our automotive business.
Matt Petkun - D.A. Davidson & Co.
Your most recent 10-K had included the mechanical analysis business in emerging, but that makes sense and that’s helping to offset year-over-year weakness in PADS. Is that correct?
Walden Rhines
Yes, though our PADS stabilized and is looking better.
Matt Petkun - D.A. Davidson & Co.
One other comment you made was that and it does seem to be true that your pricing data suggest that you’re not being impacted for the most part by all-you-can-eat deals your competitors offer. Can you make a more specific reference though to how that pricing strategy is impacting your traction with the Olympus product line?
Walden Rhines
As I did mention earlier, we’re somewhat insulated, because fundamentally we focus on platforms or products and we go through benchmarking and we tend to end up with a contract with a customer that’s based upon the value of some portion of the total flow. Rarely, do we try to throw in everything in our flow and give the customer a lot of free software to go with the software we charge for. It’s sort a different methodology. Now, in the place in route, in general those are standalone evaluations.
The place in route software as you know, has relatively high listed prices, and so when we’re chosen, we tend to be selling a place in route flow and what that typically is going up against is a flow that includes a lot of other things with it that are thrown in either for free or at highly discounted prices. We’ve seem to been able to contain that and to get a comparable value for the more limited set of product we provide and to leave the opportunity open for upside.
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