Madhu Ranganathan: Sure, sure, I missed that part in your earlier comment. So the adjustment of the ranges really reflects the strength of, again, Micro Focus from a customer support perspective, right, and we’ve adjusted that to the range. And keeping the overall fiscal ‘24 target the same from a license perspective, just consider that we have our Q3 seasonality and license, and that applies to Micro Focus as well. But it’s really the contributor there, I would say, is the better renewals for Micro Focus customer support. So we wanted to increase the range of the customer support and obviously account for some inherent volatility in the license business.
Steve Enders: Okay, perfect. Thanks for taking the questions there.
Madhu Ranganathan: Sure. Thank you.
Mark Barrenechea: Yes. Thanks, Steve.
Operator: The next question is from Kevin Krishnaratne with Scotiabank. Please go ahead.
Kevin Krishnaratne: Hey there just a couple of clarifications for me. So just on the cloud growth 6% to 8%, that was maintained. So I just want to read, is it just the fact that you’ve had the strong enterprise bookings, but they’re still offset from SMB. Is that sort of the reason why that range was maintained?
Madhu Ranganathan: Yes, I’ll take it first and turn it over to Mark. Thanks for the question. So think about the cloud bookings, as Mark mentioned, really increasing our visibility to the future, which would be fiscal ‘25 and fiscal ‘26. Our cloud contracts are long and we talked about that before and the time to deployment and to revenue are also long. But we’re very delighted at the performance in the quarter just giving us that future forward visibility. So take India for fiscal ‘24, we’re keeping it at 6% to 8% and within that, enterprise cloud revenue, analytics, experience, DN, all doing well. And as we called out SMB, it’s weighing down a bit. So we want to kind of balance that and keep the revenues at 6% to 8%.
And that revenue is really benefiting from our cloud bookings from our prior quarters, right? And the cloud renewal rates, et cetera. So I just want to separate the strength of the cloud bookings here, which is really going to be positively impacting ‘25 and ‘26, and just the factors outlining significant ‘24.
Kevin Krishnaratne: Got it, thanks for that. Just final other question here, just on the bookings. I know sometimes you’ve announced the bookings and there can be a little bit of a delay, I guess, in the translation to revenue. Is the AI-related bookings, do those look any different? Do you think that those are going to be translated from bookings to revenue at a faster pace, just given the sort of strong demand that your customers are seeing for the AI products?
Mark Barrenechea: Yes, Kevin, thanks for that question. No, the bookings related to AI are following the same characteristics as an enterprise booking. And so in the SMB space, we tend to see one-year contracts. In the enterprise space, we tend to see two to four year contracts. And so AI is following that enterprise pattern, if you will. And as we do notice, that bookings number will have a clear impact, a positive impact, in ‘25 and ‘26. But right now it looks like our AI wins will follow our traditional enterprise pattern.
Kevin Krishnaratne: Got it. Great, thanks a lot, I’ll pass the line.
Madhu Ranganathan: Thank you.
Mark Barrenechea: Thank you.
Operator: The next question is from Adhir Kadve with Eight Capital. Please go ahead.
Adhir Kadve: Hi, good afternoon guys. Thanks for taking my questions. I wanted to talk a little bit about, you know, last quarter you saw some initial bookings in AI, this quarter you called out some strengths there as well? I just want to ask how have customers really progressed in AI? Mark, you kind of mentioned that a lot of customers are still dipping their feet with the Get Your Wings program, but are some of those early customers, are they progressing faster to maybe more larger scale deployments or are they kind of still in the Get Your Wings program, get their feet wet type of deployment phase?
Mark Barrenechea: Yes, Adhir. Thanks for the question. It’s progressing and a couple why statements here. We’re going to embed AI in all our products. It’s clear that there’s a path where you have your automation and you have the learning from data. And our approach is to provide AI assist. If we automate a healthcare professional, there should be an AI persona right next to that. We automate a tech support specialist, there should be an AI assist next to it. We automate a contract specialist or a loan specialist, there should be an AI assist next to it. So we’re going to embed AI everywhere. It’s a discussion in every RFP. In every RFP and some customers are in early stages of exploring. Some are medium, a handful are more advanced.
But it’s in every single discussion. So it is certainly sort of separating out in the market those competitors, who have not necessarily even moved to the cloud or let alone have the resources to deliver a robust AI platform. So we’re seeing benefit from our very strong first waiver products and our vision, our skills now to be able to deploy a data management platform and to be able to vectorize and install a language model to be able to get customers in Earn Your Wings to actually be able to experiment either in the small or at scale, very differentiated in the markets, right? I called out our services organization that we’ve been investing in for a decade in building that service organization. So we’re making steady progress. We’ve gone from a vision to a first set of beta products, to our first version, through our first delivery, first customers using and getting value, bringing our services organization to higher capability, to a very strong bookings growth, raising our booking outlook, and seeing now how we can apply it internally on what we think is a breakthrough platform called platform Athena.
So I really like the progress that we’re making.
