Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from [Eric Martin].
[Eric Martin]
Strategically, I’m curious to know the CISCO Silver Certification, what exactly does that mean?
Paul Lidskey
Silver Certification with CISCO is a level certification for designing and selling and supporting enterprise networking. It is a crucial certification when working with customers because all of our customers expect that anyone that they contract with to design or implement a network will be at least Silver Certified which indicates a level of training and commitment to CISCO that you would otherwise not have. This means that our engineering group within the Cross organization that we acquired has the necessary skills to design the most complex data networking environments as authorized by CISCO. So, it is a very crucial certification to have.
It also provides for a level of discount when purchasing CISCO hardware and software for resale to our customers without which we would not have a competitive ability to provide that fulfillment and our gross margins would suffer as a result. So, that does provide an added benefit there as well.
[Eric Martin]
It sounds like given that the revenue was in the range that you expected but the earnings were not the impact of I guess it was more aggressive pricing on the product side do you see this as short term in nature, is this going to be multi quarter in nature and is it about displacing incumbents or is it about Greenfield opportunities and you just want to be the new vendor there?
Gregory T. Barnum
We really had two that had single digit type margins this quarter. I don’t think it’s necessarily a trend and as I said, I think our gross margins will remain in the 25.5% to 26.5% overall. I don’t see them plummeting to 24% or 25%. But, these were to get in to some new accounts so we displaced incumbents there.
[Eric Martin]
So it wasn’t about hanging on to the install basis?
Gregory T. Barnum
These are new accounts.
Paul Lidskey
New accounts. Then, as I think as we said in our earlier remarks, you can expect to see us continue to put an emphasis on increasing the size of our customer base by acquiring new customers. Some of those customers are going to be Greenfield and others are going to be displacing older technology or different technology but it is critical for our company, in order for it to grow, to put an emphasis on making sure that every day we try to make our customer base larger. We’ll continue to report on that but that will be something that you’ll see us do.
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