Sanjit Singh: And so big picture, the mantra here is that the team is going to invest behind revenue versus ahead of revenue, which had been more of the case in the past couple of years.
Stewart Grierson: I would say that’s true. Obviously, I think the most important thing there that we evaluate is both the environment we’re all operating in as well as the productivity that we’re seeing in the sales force, right? And so it’s constantly evaluating those. And that will dictate the pace at which we invest in sales capacity.
Sanjit Singh: Understood. That’s very clear. And then, Ramin, on the — or maybe this might be a question for you, Stewart, as well. On some of these customer down sells, to the extent that is happening, is there a profile of customers that where that’s occurring more versus less, whether it’s a market segment, mid-market large enterprise versus SMB or in particular industries or customers that may have really expanded significantly with Sumo Logic in the past couple of years, they may be going through a digestion period now. Is there any sort of patterns that you are picking up in some of the customers that are indicating that they may be looking to rationalize some of their spend going forward.
Ramin Sayar: Sanjit, I don’t know if anyone is immune to what’s going on out there. And if they are, I don’t know how they’re operating a business, right? I think as we look at the macro headwinds, there’s also some macro tailwinds, right? And I think those companies that have similar tailwinds are continuing to invest, but just not at the pace that they’re investing in before. So the size of the upgrades or cross-sells may be temporarily reduced or the length of the contract, right? I think no one — no particular vertical is better than another right now, to be honest. I think we’ve seen probably stronger contribution internationally than we originally thought, given everything going on with the war and the macroeconomic uncertainty, GDP, all that.
I don’t know how long that will persist, our business in the enterprise is continuing to progress as is in the mid-market segments. And we’ll continue to as Stewart mentioned, moderate that investment as we see demand and kind of budgets dictate how we invest.
Sanjit Singh: Got it. That’s very similar. That’s make a ton of sense. Thank you very much.
Ramin Sayar: Thank you.
Operator: And our next question comes from the line of Blair Abernethy with Rosenblatt Securities. Please proceed with your question.
Blair Abernethy: Thanks and nice quarter, guys. Ramin, just want to dig in a little bit more on the channel side. Just in terms of the managed service providers, how are they performing in this macro and the cloud service providers that you’ve been working more closely with over the last couple of — last year or so. I just want to get a sense of how the channel is performing for you now in the environment?
Ramin Sayar: Blair, good to hear your voice. First, let me start by saying that we’re in this transition to a channel first strategy, right, meaning that we are trying to make sure all new opportunities involve in our actually transacted through a channel partner, whether that’s a VAR, a disti or in a lot of cases, you’re referring to an MSSP or an MSP. Now to your question specifically about managed service providers, I think they’re going to play an increasing role going forward, particularly because of labor shortages, the concerns around the breadth of security kind of risks and services of attack and the technologies that are insufficient that are continuing out there gives us a great opportunity to go sign up new ones as well as continue to expand and differentiate their businesses.
Last quarter, we did sign up some new MSSPs. We saw the contribution from channel, as I mentioned earlier, increase. Now we’re seeing the pipeline being deal edge as well as opportunities from the channel being brought to Sumo start to increase versus solely the other way around. So those are all great indicators. We have a lot more work to do.
Blair Abernethy: Okay. Great. Thank you. And Stewart, just on the cloud — the gross margins this quarter. Any other color you can give us on that what you were able to do on the cloud margin, the gross margin and is this — should we be thinking of this as the new level?
