Kevan Krysler: Yes. And it’s primarily Evergreen//One. And we’ve talked about what we’ve seen this year is a cumulative build and momentum of Evergreen//One. So again, coming out of the year and developing our guide for the year, we had contemplated a really significant growth in Evergreen//One. And again, as we navigated through Q1 and Q2, we saw that that growth rate was impacted a little bit more 1 to 2 points against our annual guide. Now that we’ve been through Q3 and our visibility to Q4, now that’s about 3 points incremental to what we had provided in our annual guide. So this has been a cumulative effect. And as Charlie has pointed out, really seeing an inflection point in part, I think, due to the macro, but I also think customers are really embracing the value of this business model as well.
Paul Ziots: Thank you, Nehal. Next question, please.
Operator: The next question comes from the line of Wamsi Mohan of Bank of America. You may proceed.
Wamsi Mohan: Hi, thanks so much. I was wondering if you could maybe give us some update on how we should think about CapEx given the increased momentum of Storage as a Service. And where are you in terms of the build-out when you think about maybe this continued momentum of Evergreen//One, what sort of revenue level can the infrastructure that you currently have support? Thank you.
Kevan Krysler: Yes. I don’t think we’ll see a lot of change in terms of how we’re thinking about our CapEx. Obviously, we had higher CapEx as well this year due to the build-out of our headquarters. Obviously, we’ve got a significant amount of innovation from an R&D perspective. So we’ve got some CapEx requirements there. And really, the only other big CapEx requirement is supporting the momentum of Evergreen//One. And so that’s how we would be thinking about it from a CapEx perspective. And then obviously, you’ve got a layering on in terms of the subscription services revenue effect coming on as a result of the ramping Evergreen//One sales that we’re seeing.
Paul Ziots: Thank you, Wamsi. Next question, please.
Operator: Your next question comes from the line of Matt Sheerin of Stifel. You may proceed.
Matt Sheerin: Thank you. Commentary from one of your competitors last night pointed to a broader QLC-based adoption across the industry. So first, are you seeing any changes in the competitive landscape or market share pressure given some new product introduction. It sounds like from your previous comments that you’re not seeing that. And second, can you add more color on the success you’ve seen so far with FlashBlade//E and expectations for the new array E? And any surprises in terms of use cases or types of customers?
Charlie Giancarlo: You bet. Well, I’ll now refer to the E family given that we’ve now introduced FlashArray//E, which lowers the incoming price point, if you will, for customers from what was 4 petabytes on FlashBlade now down to 1 petabyte on flash array and even less if they take it as a service. So we really feel that it’s a very, very strong product line. We have seen that entry by one of our competitors. E comes in substantially below that. We really feel the E – the competitors see offering is much closer to our C offering. So we’re several years ahead of that. The competitive environment for our offering is still largely with disk. And disk – we say disk, but of course, disk comes in many flavors. And as we develop E further and further, we have to address all the different use cases that it’s involved in, which is what drives its growth.
That growth is still the fastest growth of any new product that we’ve had here at the company. So we’re very pleased with the growth, but it’s still at the – we’re only two full quarters in. So it’s – we anticipate that will be a much more meaningful part of our revenue next year.
Paul Ziots: Thank you, Matt. Next question, please.
Operator: The next question is from the line of Eric Martinuzzi of Lake Street. You may proceed.
Eric Martinuzzi: Yes. Curious to know how you feel about your sales capacity is typically when you’re evaluating your coverage for the coming year? Are you planning on adding sales?
Charlie Giancarlo: The answer is yes. We believe our capacity is at the level that we had planned for. And we’re planning, obviously, to grow. So we are adding to our sales force have been throughout the year, but Q4 is a key time to bring in new players. And so we will be adding to our sales force.
Paul Ziots: Thank you, Eric. We have one more question. So next question will be the last question.
Operator: The next question is a follow-up question from the line of Krish Sankar of TD Cowen. You may proceed.
Krish Sankar: Hi. Thanks for taking my follow-up. I just wanted to follow up on the Evergreen//One. What sort of time frame are the – are these contracts, for example, just to like make it simple. You said it’s a three percentage point headwind for your FY ’24 outlook. It is very simply that the next two years are flat and because of this one, is it like a 1% uptake every over the next three years, if it’s a three-year subscription model. I’m just kind of curious how to think about these Evergreen//One subscription.
