Dynatrace, Inc. (NYSE:DT) Q3 2023 Earnings Call Transcript

Rick McConnell: Sure. Well, it’s €“ we have had a primarily direct model previously, but we have already reported in the past that more than 50% of our deals are partner influenced and partner delivered. So, we already have a very strong presence with partners. I would say that, that will simply continue. And where we believe we get the flywheel momentum and more movement in the model from a go-to-market perspective is really through partners. And as we indicated in the prepared remarks, we really see those as primarily coming from hyperscalers and GSIs.

Andrew Nowinski: Super. Thank you.

Operator: Our next question is from the line of Raimo Lenschow with Barclays. Please proceed with your question.

Raimo Lenschow: Hey. Thanks. Congrats from me as well. Could I go back to Matt’s question at the beginning, Rick. So, when you talked about the €“ when we talk about the optimization, I believe like from €“ like I was on the Maxo calls as well as their comments were more, like people had overcommitted maybe to their cloud. There were some big contracts and now you are kind of trying to think about how you run that. How do you see that play out for you? And you talked a little bit about that already, do you see that optimization as, like less workloads going to the cloud, or is it more the workloads I have, I want to run them more effectively? And then I have one follow-up.

Rick McConnell: Well, Raimo, certainly, there is an element of cost optimization here as well as Sathya talked about in the Microsoft call, Azure. So, there is no question that, that’s occurring as some cost rationalization. But there is also, as I mentioned, a key element, which is overall cloud workload optimization, which is making sure that you are getting the most out of the cloud deployments that you have made. And that’s really where Dynatrace comes in play in making sure that you are really getting positive ROI, delivering exceptional end-user satisfaction, that that software works perfectly. And remember, sort of our overall thesis from the beginning is that cloud workloads make it easier to expand more rapidly. That creates an explosion of data, an increase in its complexity and it renders manual management and oversight of those workloads much more difficult.

And we automate that. We automate that process to enable you to do more with less, and that’s really what cloud optimization is about. So, we feel that that cloud optimization is a very consistent trend with cloud done right and our efforts to entre.

Raimo Lenschow: Yes. Okay. Perfect. And then the other €“ and there were lots of positive numbers out here today, but the one €“ nice one that stood out to me was the customer add number. And you mentioned the global SIs. What do you see in terms of buildup of practice, people addition to what the global SIs are doing? And are there more €“ some that are spending out more? Is it a theme for a lot of them? Can you talk to that, please? Thank you and congrats from me as well.