So we’re not in any way taking our foot off the pedal on that. The second point that you made about GenAI and GenAI utilization in the cloud, as of right now, the costs are relatively modest. I think as they scale, naturally, as the GenAI costs scale our infrastructure cost to run it, there will be interactive, more relation from that to actually ACV and cloud revenue that we’re getting from our clients. So we do not believe that will be a headwind to margin expansion by any stretch. We think it will be just a cost of doing business like our AWS and GCP costs are.
Alan Trefler: Yes. And we’ve been, I think, very aggressive and thoughtful in working through how at this point we want to apply to GenAI. And so the way that we have done it and we have got information about this on our website. Our CTO has a nice little seven-minute video about how Pega applies this technology is through the use of vector databases and what we called RAG techniques or retrieval augmented generation that allow us to use a conventional model, say, ChatGPT. I think Gemini from Google, think Bedrock from Amazon and being able to pick the right model to use to be able to assemble the analyses from the work that we are doing. In a way that I think is very cost-effective. So, we, I think have a way of doing this. It’s going to scale up nicely as the business grows.
Jake Roberge: Well, that’s helpful. Thanks for taking the questions.
Operator: Your next question comes from the line of Dan Ives with Wedbush. Please go ahead.
Dan Ives: Yes. Thanks. So, on the go-to-market strategy, looking at [ph] AI, can you just talk about what we could expect next three months, six months, nine months? Like is it more partnerships even ramping up internally in terms of the types of individual. Can you just talk about from a go-to-market in terms of like the next steps there?
Alan Trefler: Yes. So, we definitely are working with some key partners and looking to broaden the partner relationships, and there is a lot of enthusiasm from partners to be able to apply some of this new technology here as well. What I am excited about is I have never seen such a quick uptake, never seen such a quick uptake of a capability like what we have put out there with Blueprint. I mean by like a factor of 10 in terms of the number of customers, the number of things they are actually doing with it. And it really gives them a taste of GenAI. By the way, not just in English, where I love I was over in Europe two weeks ago. And what we have – I couldn’t read any of them with people generating Blueprints and dubbed in Italian.
And it was really quite remarkable to gauge their reaction to the stuff I couldn’t understand. So, the uptake on this, I think our go-to-market is going to end up being a lot more viral than it has been historically, and we are looking to ramp up to support that.
Dan Ives: Thank you.
Operator: Your next question comes from the line of Steve Enders with Citi. Please go ahead.
Steve Enders: Okay. Great. Thanks for taking the questions here. I guess we would just to start, like I know ACV kind of came in, in line with the growth expectations for the quarter. But I guess how would you kind of like frame where the macro environment is today and how people are viewing opportunities and budgets and maybe the impact that AI is having on that so far?
Ken Stillwell: So, I will take, probably I will add some comments. I will take it first, and Alan can add some comments. So, Steve, I would say that the economy continues certainly in the organizations that we are engaging with continues to be pretty resilient in terms of clients wanting to invest in digital transformation. And I think that GenAI is just an accelerant to that momentum because the clients are looking at GenAI and digital transformation, not as two different things. They are looking at them as being very related. How do I manage this legacy application situation that I am in, and when I think about developing new capabilities, how I want to insert GenAI, we are actually taking even a different angle to that, which is how we leverage GenAI to help you accelerate your digital transformation to get you faster to the place that you want to get to.
So, I think that there is still a tremendous amount of resiliency in the market. And quite frankly, I think clients are thinking at the same, we are in an increasing pace around digital transformation than they were over the last 12 months to 24 months. So, I think we are feeling very good about clients’ interest in Pega solutions and how we can help them with digital transformation. Naturally, we have an election coming in the fall. Interest rates are still high. Inflation is kind of coming back a little or not. I mean there is a lot of macro distractions there, but we see our clients really investing heavily in their digital transformation journeys.
Steve Enders: Okay. Great. That’s helpful. And then I guess just on the – now the Blueprints are out there, like are you seeing – have you seen like customers actually convert that into production apps yet done at that capability is out there, or how should we kind of think about maybe the impact of having on like top of funnel or that kind of conversations that you are having today with that?
Alan Trefler: Well, we are talking about something that’s really been out there for a grand total of two weeks. So, it’s a little premature. But we see that happening imminently, I think by PegaWorld we will have a number of success stories background.
Steve Enders: Okay. Perfect. That’s helpful. Thanks for taking the questions.
Alan Trefler: Thanks Steve.
Operator: Your next question comes from the line of Austin Cole with Citizens JMP. Please go ahead.
Austin Cole: Thanks for taking my question. I have got yet another Blueprint question. I think the excitement around that is tangible. I was wondering if you can share any detail. And as you mentioned in your prepared remarks, partners coming with new ideas, maybe you can’t go into detail on that just yet. But then also anything you can share on maybe the breakdown between Pega clients using Blueprint and non-Pega clients that are coming to Blueprint and those two buckets and where you are seeing that distribution? Any detail there would be helpful. Thank you.
