Nikesh Arora: The only thing I am seeing this time – we’ve seen a lot of extraneous factors which have muted the outcomes for the industry, with the supply chain crisis, with the pandemic, with the Poland supply chain. Now with the Fed increasing interest rates, I’ll tell you, one of the easiest decisions for our customers to make is to sweat their assets a little longer. Because it’s not like these firewalls suddenly blow up at the end of life. They can be extended. So laces and I don’t rather put the money in my cloud transformation and sweat the asset a little longer. So if you add all to the miss, that’s why we went through this whole cybersecurity transformation of the company. We wanted to take away the impact of any 1 product line.
Clay Bilby: Next is Joshua Tilton of Wolfe Research, with Adam Borg to follow.
Unidentified Analyst: It’s Patrick on for Josh. It’s Patrick on for Josh. Over the last several second quarters, the sequential billings guides have been in the 9% to 10% range. But the guide for next quarter implies a 12% sequential growth. So how do we interpret that? Is it a little more aggressive than usual?
Dipak Golechha: I think probably the way that I would — I wouldn’t interpret too much in it. But at the end of the day, we have pipeline. We have lots of large deals. It really depends on when deals come in. They can have a significant impact on your billings. And so we’re just trying to be as transparent as we can in terms of the information that we have on hand. There’s no magical math behind the guide.
Clay Bilby: Next is Adam Borg of Stifel, with Rob to follow.
Adam Borg: I really appreciate it. Maybe just on a topic we haven’t heard today on OT cybersecurity, that’s an area that we’re just picking up more in our checks is seeing some more focus. And I love to think about — hear a little bit, Nikesh, how you’re thinking about the opportunity and what plays?
Nikesh Arora: Yes, we’ve been very focused on making sure that we make IoT capability available as part of our integrated portfolio. So you don’t have to put get 1 more sensor and get 1 more cybersecurity vendor. Surprisingly, the can you talk about? We’ll let Lee talk about it, yes.
Lee Klarich: Look, OT environments have long been secured by keeping them disconnected from everything else. And there’s OT environments that are still running Windows 95, Windows NT, for those who have been around for a while. That obviously has significant risk. And so the way to control that is simply segmented and walled off from the rest of the world. But what’s been happening over the last couple of years is OT networks are increasingly being digitized, specific parts of them are having to be connected to the cloud, which also means the OT and the IoT are starting to merge together a little bit more. And so as that happens, there’s a greater interest in thinking about what the next generation of security for an OT environment looks like.
And so this is where our ability to come in with a next-gen firewall infrastructure that can provide the segmentation where it’s needed. But layer on top of that, the IoT OT security capabilities designed to secure that transformation is starting to pay dividends. I still think this is early days in transformation, but there definitely is a strong interest in these types of organizations. And as Nikesh mentioned earlier, many of these are oil and gas utilities and others that actually are seeing some of the benefits of some of the recent macro environments. And so that’s also part of an opportunity to leverage and make investments now.
