John McAdam, President and Chief Executive Officer
Thanks Andy and good afternoon everyone. ALOHA Red New came in at the lower-end of our guidance and I’ll comment on that in a moment. I was pleased with the significant progress we made in all our major initiatives. For example we have some very strategic sales wins in the service provider market. We had a very successful launch of Silverline, a key component of our hybrid application services strategy. We added significant functionality to our orchestration and management product BIG-IQ which was key to winning the strategic security wins and is also another component other hybrid applications services strategy. We also continue to make great progress with our SDN partnerships both in technology and in go-to market initiative. From a sales perspective, the majority of the shortfall are coming from the Americas region where we experienced larger than expected drop in million dollar plus deals in both large enterprise and US Federal opportunities. We believe this was a seasonality issue due to a very large number of large wins closing during a fiscal year and Q4 drive.
On a positive note the pipeline creation rate in Q1 was very strong and the pipeline for the quarter looks very, very good. So I misquoted a sentence here from what originally had. The Japan business was also below internal forecast but this was not a major factor overall. Both APAC and EMEA delivered year-over-year sales growth. The EMEA region was a star of the quarter and once again delivered an excellent performance with solid year-over-year growth. Our services business continue to deliver solid results and excellent profitability along with the healthy increase in deferred revenue which is now approximately $680 million and should bode well for future business. We continue to experience strong momentum with our Good, Better, Best sales motion in Q1 with customer adoption continuing to be very strong in the Best category highlighting the success we are achieving with our security solutions. I was also very encouraged by the continuing strong growth of our software revenue which increased 44% year-over-year. The fastest growing area in our software business is our core virtualization ADC. Our software growth is being driven by the increasing customer demand for hybrid solutions that allow greater flexibility in the deployment of application services within and across data centers and into the cloud. Our ability to provide our solutions as special software-only offerings across all the major high providers, combined with our unique orchestration functionality in BIG-IQ, is enabling customers to move to software-defined data centers and NFV architectures.
We are also seeing growth across the entire portfolio of our software module offerings driven by the rapidly increasing reorganization and ADC is ideal platform to ensure application security. Our security business continues to be a largest growth driver with strong sales across the security solutions portfolio including ASM, APM and AFM. I already made reference to strategic security sales wins in the service provider market. We won’t allow to AFM Gi firewall sales to Tier 1 service provider which resulted in two transactions in Q1 being over $1 million each in value. I have mentioned several times last year that our BIG-IQ security management and orchestration product road map was being influenced by our Tier 1 service provider in North America. This initiative has proved to be very successful and we are now starting to see some real momentum globally with our Gi firewall solutions and we believe it can be a strong growth driver in fiscal 2015 and beyond.
