Operator
Okay next question Subu Subrahmanyan, The Juda Group. Your line is open.
Subu Subrahmanyan, The Juda Group
Thank you. Two questions. First on the service provider side, if you could talk about given the CapEx backdrop you certainly have some wins and share gain opportunities. So how do you think about the service providers vertical for this year? Do you expect it to grow us a percentage of revenues in fiscal ’14? And then in the virtualization side, I certainly hear you John that the deals are large, but if you do a comparison with the architectural changes, if you had sold all hardware instances as you might have few years ago versus a mix of hardware and software, what that is doing to the overall dollar value of the deals and also the profitability of the deal that would be helpful.
Manuel Rivelo, Executive Vice President of Strategic Solutions
Subrahmanyan, this is Manny. I am going to answer on the service provider. On the service provider, four major drivers that I think of. We talked a bit about it, definitely in John’s prepared comments, which is consolidation across the board from a service provider point of view and that is consolidation of services predominantly traffic-steering services, care-grid map services and some of other services in there that were consolidating in that type of environment. That reduces CapEx really for many of the operators who are out there because they’re going from multi-vendor to single vendor. Second major driver we have a security which is also something we can overlay on that same footprint again through a consolidation point of view, but we call it out as a separate driver because of just the impact from the side associated with that. But there is NFV and the NFV footprint that we’re seeing out there which are still early proof of concepts to some degree and we are in various proofs of concepts across the world. We’re trying to see some of those pan out and that’s what happened in this past quarter and why we got a big bump, also on our software sales. And the last is the LTE, of the mobility movement going to 4G networks which we’ve been feeding in the customer environment for the last two years. And was trying to see there also from a driver perspective is that these networks get deployed, get accepted, usage volume goes up, new devices are being enabled meaning additional mobile handsets, but also new devices from the perspective of the internet of things that we’re going to see additional software license there. So those are predominantly the four major drivers and those are usually either tackling the CapEx line from a consolidation point of view, or the monetization line from something along the perspective of LTE and being able to bring on new services to the market.
John McAdam, President and Chief Executive Officer
And on the virtualizations, similar things, which I think –it’s very similar to answer to a similar question. Basically, first of all, these are still smaller number. I mean this is still a relatively small market versus overall ADC market but the deals that we’re seeing are pretty large in nature and we need to market exactly to see the demonstrations, all hardware versus all software. I am not sure we see much difference quite frankly. So I don’t think that’s – if you’re looking for is that a factor in what happened in terms of bringing us to the lower-end — we don’t think so.
Manuel Rivelo, Executive Vice President of Strategic Solutions
And just to add one more comment — Manny again — on the software side that we see is we see an expansion of the application needs in the market segment. What I mean by that is, historically a handful of applications in the typical enterprise and service provider got the ADC services, because it was harder to deploy, much more complex. As we move toward a much more software-based architecture, what you see is a broader set of applications getting these services, got the things to do to deploy to those services in the environment. So it’s actually to a large degree and expansion in the market.
Subu Subrahmanyan, The Juda Group
Alright, thank you.
