Matt Calkins: I feel like we’re a lot stronger than we were a year ago. That’s how I’d read it. I think that we’ve been careful with the changes that we made last year but they’ve been changes for the better.
Operator: And our next question comes from the line of Derrick Wood from TD Cowen.
Unidentified Analyst: This is Cole [ph] on for Derrick. You flagged good strength in the TCV for top 10 net new customers. Could you just unpack that a little bit and talk about what drove that strength?
Matt Calkins: Yes, all right. Well, first of all, I think part of it is driven by our strategic focus. We believe we belong in the big organizations doing mission-critical things at relatively higher price points. And that strategy, I think, has something to do with the fact that we’re seeing higher TCVs on our top 10 deals and for that matter, higher on our median deal, right? We’re just trying to raise the target sites a little bit and we’re seeing that that’s happening. So yes, I’ll just say it’s strategically aligned, right? It’s not unintended. And I don’t want to make any promises about where it’s going, just to say that it was gratifying to see it come in where it did because that’s what we intended.
Operator: And our next question comes from the line of Kevin Kumar from Goldman Sachs.
Kevin Kumar: I wanted to ask about the international public sector and the traction you’re seeing there. Maybe talk a little bit about the go-to-market investments you’re making there. And higher level, I guess, how early are these public sector organizations in terms of thinking about AI and kind of implementing more intelligence into their workflows?
Matt Calkins: As you know, we’re a Washington company and I’m looking at the beltway out my window right now as I take this call and we’ve done a lot of business here in Washington, D.C. with the federal — U.S. federal government. And the international public sector has always represented a big opportunity for us. And for that matter, so has state government in the U.S. and it is a largely untapped opportunity. We — I did mention in the prepared remarks one substantial organization in the state government level that works with us and does hundreds of millions of dollars of procurement every year on the Appian Platform. That’s great but that’s the beginning. This is tip of the iceberg stuff. And even though we have notable wins in other — the international or non-federal public sector opportunities, I still feel like the penetration is so minimal.
We’ve done just enough to prove we can do it and not enough to show what we can do, like how much we can do. So that’s an opportunity. We look forward to moving into. We’re making an effort to move into it. And it’s largely unsaturated right now.
Operator: [Operator Instructions] Our next question comes from the line of Frederick Havemeyer from Macquarie Capital.
Frederick Havemeyer: I wanted to ask about data fabric in a little bit more depth here about, generally speaking, it seems like being in the enterprise data space and data integration space right now is a fantastic bit of positioning considering what enterprises are trying to do with their data and trying to make it useful. And of course, everyone is trying to have a Gen AI strategy. So I’m curious with data fabric, when you’re helping customers implement this, what have been the most significant challenges that you’re helping them to address? And also around that, what are the most significant challenges that you or your partners face when implementing an onboarding customers to data fabric?
Matt Calkins: Yes, all right. First of all, you have to open up their imaginations. The typical organization does not imagine that it will be possible to merge data silos and to have synthesis or combined benefit from them. We’re so used to an enterprise software landscape that is dominated by the walls, right? That is cut into silos. You have to — you first just tell them that it’s possible. And then secondly, the integration. Sometimes it’s easy. Sometimes it works with APIs and it’s very intuitive. And in some cases, the entities could have been custom-built or very out of date and then integration is a bit more of a challenge. But once — it’s not so difficult to overcome once you convey the benefit, we can easily stitch these data silos together.
It’s simpler than one might imagine. And it’s very fully featured. You can read and write, you can filter by individual permission access. It’s actually a really powerful layer. By the way, the strength of the data fabric is such that I expect that this year, more organizations will start saying these words, data fabric. They’ll claim that they’ve got something like it. And I suspect that what they have is not going to be fully featured the way what we’ve built and have had for years is. It’s an artifact of our divergent data strategy. Many of our competitors have a data strategy whereby they seek to claim to unify and to own the data in an enterprise. And they are big enough in some cases to pull that off, to use their size, their leverage against their customer and to force a kind of an aggregation under their own flag.
We do not attempt that. Instead, we have always had a, call it, pro customer, if you like, an open data strategy that respects and empowers and enables the customer’s existing data architecture. And that’s why we got into this data fabric concept in the first place, is because we wanted to be the vendor that would enable the customer to have the data the way they wanted to have it, instead of trying to force it all into our database. So we have taken this — we’ve built this technology because we first took this decision to be the sort of company that would enable to disperse data strategy. And because our rivals have largely not taken that decision, they have also not developed that technology. I think that because this is the result of different beliefs about how the market works, it might be a more persistent technology division than it might initially appear.
