The big difference over the past year has been that everybody’s been doing that at once and multiple times. It was really an environment where everyone was feeling very uncertain about the economy and needed to save money very quickly. So we expect optimization to continue as part of this macro trend in the near future and in perpetuity after that we’ll have that continuous cycle of customers optimizing, reducing where they can reduce and then growing workloads and maybe creating a little bit more mess over time as well, and then optimizing again on the regular basis. Not everyone at the same time.
Matt Hedberg: Super. Thanks a lot guys. Great color, Ollie. Congrats again.
Operator: Thank you. One moment for our next question. And our next question comes from Fatima Boolani of Citi.
Fatima Boolani: Good morning. Thank you for taking my questions. One for Ollie and one for Dave, if I may. Olivier, the packaging and pricing motions that you discussed for the DevSecOps solutions that I wanted to zoom out generally a little bit in knowing what you know about how buying behavior and procurement behavior for a lot of your customers has changed over the course of this past year. I was wondering if you can shed light on how you’re thinking about an ELA or EAA type selling motion. I know it’s something that historically you’ve been averse to, but I’m curious how you’re thinking about it in the current day and age, if you will, in terms of how your customers have changed the way they’re buying and deploying. And then for David, just wanted to get a sense of what expectations on net retention rates are built into your guidance.
And in other words, should this be the quarter that we see a trough in expansion rates or net retention rates as you’re thinking about it in the guidance? Thank you.
Olivier Pomel: Yes, so on the ELA, so in general, look, we’re always very open to new approaches in packaging. We try to see how things are consumed from the customer side, what makes the most sense to them. Now, ELA and things like that are very difficult for — or very inappropriate for a business like ours. One, because we are fully SaaS based and there’s a very, very large volume dimension to absolutely everything we do for our customers. So it’s very, very hard to provide one price fit all for them. We also, philosophically, we like to have, to get signal from what customers are willing or not willing to pay for, and that drives a lot of our product innovation. We get a lot of good news this way because customers want to buy products and they scale them a lot.
We also get bad news. We get customers who don’t find there is enough value in a given product or think it should be doing more or think it should be doing things differently or think that the packaging doesn’t make sense. And we like to have that. The reason why we simplified the pricing there and we created those new SKUs is really to try and change the motion a little bit and integrate further the validity and the security side and make it easier to bring security into the conversation for these customers. Again, so far we have some early evidence that it seems to resonate, but it’s way, way, way too early to call it. We need two, three quarters of that to understand the implications of the new packaging.
David Obstler: Yeah, and as it relates to net retention, we do not provide guidance, but just the way that we think about it and some of the drivers, we don’t provide guidance, sorry, on net retention per se. But essentially what we said was that Q3 organic growth was similar to what it was in Q1. And we had said previously that in Q2 and Q3 of last year, we had lower than before but higher than that Q1 — Q4, Q1, and now Q3. So it really is a matter of lapping those comps. The comps have gotten increasingly easy to lap, and we will let everybody know if we do produce an organic growth that’s higher this Q4 than it was in Q4 last year, we will have in this period trough in that retention and it will begin to head up. So that’s sort of how we think about it.
In terms of our guidance, that’s a different story. As we said, we provide conservativism. So what’s implicit in the guidance is something worse than we’re experiencing, which would apply a lower organic growth. But in terms of the business trends themselves, it’s really a matter of do we lap the Q4 and produce a higher organic growth in the Q4 coming up than we had in the Q4 last year.
Fatima Boolani: Thank you. I appreciate the detail.
Operator: Thank you. One moment for the next question. And our next question comes from Brent Thill of Jefferies.
Brent Thill: Good morning. David, I was curious if you could focus on the enterprise traction and what you’re seeing, maybe for Olivier. And David, I guess on the customer ad, you’re 700, and that’s lower than your normal cruise altitude of 1,000 plus per quarter. Can you just talk about is that number being misled because the enterprise traction is higher and that number is therefore going to be lower. Could you just drive into that a little bit? Thanks.
