E2open Inc (EOPN)’s Third Quarter Fiscal 2015 Financial Results Conference Call Transcript

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And I am seeing one other thing Bavan is that I think we are also just trying to be maybe a bit more conservative on our outlooks too because it’s just not — obviously we are unhappy with the inconsistence of the performance and part of it was also just — the part of the issue of the booking outlook too is based on as I mentioned we’ve changed a bit our methodology around forecasting. I think some of the things were forecasted as a deal before, now I am not. So I will put a little more conservatism I think into it. And the average deal size is probably more affected by like the new business, not the upsell business.

Bavan Suri
Okay. I guess it just begs the question that, I know you are saying you are going to continue spending on sales but you have made the organization leaner and you’ve flattened it out. You’ve moved some people into the partner side of things. I guess when you look at the business, what gives you the confidence that this can reaccelerate back up without making any investments which then leads to are you cutting too much here to actually drive growth?

Mark Woodward
Well I wouldn’t think, I mean the most significant effect on our revenue for the year is from the cancellations and non-renewals we had, right. If you added up starting with at the beginning of the year we dropped $10 million, right. So that’s the single largest affect. I absolutely believe the pipeline is there. I mean as you can imagine I’ve been doing a lot of scrubbing on the pipeline and have been highly involved and as I’ve always have been. But really digging into the business as we’ve kind of transitioned it over and made some of the changes that we did, and I just know the business was there simply by being involved and looking at it and just seeing it in the pipelines. And so that’s why, I am not sure if you are looking for that much reacceleration, I think just by us not having the cancellations next year we did this year, and having growth that’s at bookings standpoint, it’s even equivalent to what we had this year on a net new basis, and revenue comes back.

Bavan Suri
Yes, you had that large deal last year that one of the SIs helped you closing the deal, energy gas deal that was I think it was 4x or 5x the average size of the typical deal, figured it would take 12 months to implement. I would expect some of that stuff given that the incremental customer adds this year. All that sort of stuff, the solid bookings the previous year to sort of drive revenue growth nicely through the year, it’s more of my concern around bookings growth and sort of the stuff I am supposed to sign but how do you drive net new bookings if the sales team is not leaner and shifted a little bit.

Mark Woodward
Let me be clear about that. So we have made no reductions in sales head count. It’s purely in management and structure. So we’ve taken a layer out and we’ve done some consolidation at the management level. We’ve made no changes at the field level.

Bavan Suri
Okay.

Mark Woodward
It’s really just allowed us I think to get closer, it just allowed us to get closer to the business.

Bavan Suri
How has the market, the competitive environment changed at all? Are you seeing more pressure from the competitors from a price perspective or from an offering perspective?

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