Brian Roberts : Sure. And I think in terms of our strategy, look, we’re pretty consistent here. We want to increase efficiency and speed of execution. If you zoom out and look at the year, we are increasing our investment in the sales and market — sales and marketing in our go-to-market area to expand, especially in our international presence, improving some of our coverage ratios and really position Splunk to win in new accounts. And then on R&D, look, we’re continuing to make R&D investments under new leadership, and I hope you got a sense from .conf that we’ve really accelerated our pace of innovation. We just — we’re becoming more efficient as we increase hiring in our global talent centers. And if you look at the R&D trends, we had a cost action in Q1. But in Q2, R&D grew faster than any other expense category on a sequential basis, and we expect this trend to continue in Q3.
Operator: Your next question comes from the line of Andrew Nowinski from Wells Fargo.
Andrew Nowinski : Congrats on a great quarter. So I wanted to ask about the partnership with Microsoft coming off your user conference that you announced that. You mentioned the first win already was a boomerang customer. I was wondering which vendor they replaced to come back to Splunk. And why did it take the partnership with Microsoft to convince them to come to Splunk? I guess I’m just trying to understand how applicable their thought process is to the rest of the customers in Azure that you might be able to flip?
Gary Steele : Yes. No, great question. I think what we’ve seen in the feedback we’ve gotten, the impetus for us to go drive that relationship with Microsoft was really driven by the customer feedback, both Splunk and Microsoft. And I think there’s this — because there’s a lot of data that lives in Azure that people wanted to have Splunk natively available there. The real opportunity for us is to get to native Splunk solution on Azure, which we believe will have within the next 18 months. And that initial transaction that we saw, I don’t have all the details actually of that. I think it’s just the simple opportunity as someone wanting to be able to leverage their credits, having an experience in Splunk and that momentum then carrying through to a very quick transaction. But I think there’s a very positive sentiment on the combination of Splunk and Azure.
Operator: Your next question comes from the line of Shrenik Kothari from Baird. Your next question comes from the line of Keith Weiss from Morgan Stanley.
Sanjit Singh : This is an Sanjit in for Keith. Two quick ones from me. On the back of a lot of product announcements on the security side and on the observability side, post the .conf conference, is there any changes in sort of pricing and packaging and sort of go-to-market motion behind the capabilities as we look into the back half and into calendar ’24?
Gary Steele : There are no price changes. Obviously, these new capabilities represent additional add-on capabilities that customers can purchase. But the basic pricing structure, how we’re going to market we’re basically taking these new capabilities and putting them through our existing structure.
Sanjit Singh : That makes sense. That makes complete sense. And then just as a follow-up. You mentioned a number of unified security and observability wins in Q2, who is actually making the purchasing decision? Is this being handled by the leadership of the Splunk team? Or this is the have buy more of the centralized platform or the operations team is sort of leading the charge on making these architectural decisions?
Gary Steele : Yes. No, great question. And typically, and then we could go through the details on a couple of these different customer wins that we talked about. Typically, we’ve anchored in with the CISO. We have great acceptance broadly across the security team, and then it spreads into broader IT and the observability sale typically then gets driven by a combination of CIO, CTO, and under CTO is typically ahead of operations. It’s collectively across those folks. So it’s not — the decision is not being made by security. It is basically we’re getting the endorsement and handoff from security, but it’s getting made centrally in that CIO, CTO, Head of Operations area.
Operator: Your next question comes from the line of Jacob Roberge from William Blair.
Jacob Roberge : Congrats again on the great quarter. Helpful commentary on the Cribl lawsuit and what you’re doing with your Edge processor to maybe help combat some of those potential competitive threats. I’m curious what you’ve seen on the adoption front for that product from your existing base, just given it’s free for cloud customers and kind of how they’re parsing out the data distribution with that product?
Gary Steele : Yes. No, great question. It’s relatively early. People are excited because they like the idea of not having to pay yet another license fee for something sitting around Splunk. And so I would say the reception has been very positive, but I would also say it’s early.
Operator: Your next question comes from the line of Rob Owens from Piper Sandler.
Rob Owens : Build on the unified security and observability questions from earlier. Maybe understand just where you are in terms of that process. Realizing it’s early, but any metrics you can share in terms of security customers versus observability customers. I think more importantly, where you’ve landed with both the cross-sold both, excuse me, what’s this doing to deal size? And how do the new AI capabilities potentially accelerate this, if at all?
