Erik Suppiger: Two questions. One, you said the sales cycles continue to elongate. Are they still getting longer, or is it just they’ve kind of reached a level of extended cycles? Is it consistent with last quarter? Is it actually getting longer? And then secondly, you’ve had some time now to talk with customers about their Chat GPT-in-a-Box. What are the specific use cases that customers are using either what department are they using that for, or how are they using that in particular?
Rukmini Sivaraman: Thank you, Erik. I’ll take the first one. Yes. And then Rajiv you can take maybe the GPT-in-a-Box question. So on sales cycles, what I said in my script, Erik, was that we’re seeing some increased elongation, right, in — a modest increase in average sales cycles on a year-over-year basis. I’m comparing Q1 to Q1, it has gotten longer in Q1. But if you look at average sales cycle in Q1, it was more or less the same as the last few quarters. So it’s not like it’s continued to lengthen early quarter-over-quarter, but year-over-year, it remains elevated. And this — again, it’s hard to sort of focus what’s going to — exactly is going to happen here, given all the uncertainties we’ve talked about, but that’s what we saw in Q1.
Erik Suppiger: Okay.
Rajiv Ramaswami: So Erik, on the GPT-in-a-Box. By the way, it’s GPT not ChatGPT. So on the GPT-in-a-Box section, there are four use cases that we typically see. And again, I want to caution all this by saying it’s pretty early. A lot of people are just trying to figure out how to use gen AI. But the four use cases right now. First, of course, is a classic customer service use case. That includes chat, that’s one. The second is a whole bunch of operations having to do with documents, document, search documents, analysis documents, retrieval of key information from unstructured data, for example. So that’s the second big, I would say, a use case. The third use case is co-piloting, generally providing assistive services, for example, to software developers or researchers in pharma for example.
That’s the third use case. And the fourth use case I would broadly classify as fraud detection or fraud prevention. And these are things across multiple verticals. I think these tend to cut across verticals, whether it be financial services or retail or our federal or other.
Erik Suppiger: Last question is you talked about the class of customer service. Is that the majority of the use cases at this point, or is it spread across those different four options?
Rajiv Ramaswami: I would say it’s spread across. It’s — now the customer service one, for example, happens to be one that we are ourselves internally trialing right now within Nutanix. But I would say it’s fairly broad-based across all of those four. And it’s still very early, I have to say, to say, hey, we can actually say, hey, this percent of one use case versus the other. It’s just, we are in the forming stages here.
Operator: Our next question will be coming from Meta Marshall of Morgan Stanley.
Unidentified Analyst: This is Karan on for Meta. So just first question, I understand it’s sort of a challenging environment today. But I guess just in terms of customer conversations or what you’re hearing from customers in terms of 2024 budgets, I guess what are you hearing from customers on those budgets? And are you seeing a pickup in any RFP activity?
Rajiv Ramaswami: I wouldn’t say there’s anything specific we are seeing in our conversations with customers. I think, certainly, look, I would say they’re still investing in their digital efforts, in their modernization efforts. Every customer call I have, there’s conversation on how they can be using AI inside their companies. So from a budget perspective, I would say, in general, I think, IT spending will probably grow faster than GDP growth. And within that, I would say software modernization spending will probably grow faster than that. But we haven’t seen any specific trend other than the fact that there are — customers are still on us, at least, they’re willing to spend the money. They want to make sure there’s a solid business case and there’s good TCO and ROI for everything that they do.
And there’s certainly more inspection, which is what is causing the elongation in the cycle, right? They want to make sure there may be an additional level of approvals, for example, before they sign up on projects. But, they’re still moving forward with projects.
Unidentified Analyst: Okay. That’s helpful. And then a quick follow-up. Sort of at the Analyst Day, you mentioned some of the VMware share gains would likely take place, with just a little bit of share with each customer over time. I guess as you started to see these opportunities take place, are these shares maybe — the share taking greater than expected, or is it just more opportunities or more at bats, or I guess just any color around sort of the opportunities you’re seeing in share gains there?
Rajiv Ramaswami: Yes. I think we commented on the overall situation from a VMware Broadcom perspective. Again, I think we are still at a point where we have a significant and growing pipeline of opportunities that we are engaged in with prospects. But it’s hard to predict what portion of those will win? How much will they, for example, bring us in as a second vendor or the sole vendor or just use us as a negotiating lever to get a better deal from VMware. So there’s a lot of uncertainty and lack of predictability there for the long term. So we’ve focused — or the timing, for example, for when this might happen. So, we — that’s why we have — we’ve modeled in some level of share gains here into our forecast for the year and incorporated into the guidance. But it’s going to be — I would again emphasize that it’s going to be a multiyear thing for us here. And it’s going to be a bit timing, and the exact share gains are going to be a little unpredictable.
Operator: Our next question will be coming from Ben Bollin of Cleveland Research.
Ben Bollin: Rajiv, I wanted to ask about the Global 2000 Financials Awards. Could you share a little bit about what that process looks like? How long was the evaluation, the pilot? And how does the ACV ramp for that deal? Does it build over time, as they get more data centers? Does it commence at a full run rate? Just any color on that? And then, I have a follow-up.
Rajiv Ramaswami: Yes. So this particular bank in Asia Pacific, the G2K bank, has been a customer for a while for us. And what they’ve been doing, of course, is the classic, they’ve been migrating from traditional legacy 3-tier infrastructure over to HCI. And for many years — I mean, they’ve been a customer for a while now. And for many years, it was a dual vendor situation with us and VMware. And — so they’ve been going down both parts. They had us, they had this sense. And this was a classic time, where we were coming due for renewal, and they were also looking to expand, significantly increase their presence, they’re growing and they had multiple data centers that they were going to go modernize. So for them, this was a time for them to — for us to do an expansion along with the renewal, a substantial expansion.
