Good day, ladies and gentlemen. And welcome to the CommVault Systems Q3 2017 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. I would now like to introduce your host for today’s conference, Michael Picariello, Director of Investor Relations. You may begin.

Good morning. Thanks for dialing in today for our third quarter 2017 earnings call. With me on the call are Bob Hammer, Chairman, President and Chief Executive Officer; Alan Bunte, Chief Operating Officer; and Brian Carolan, Chief Financial Officer. Before we begin, I would like to remind everyone that statements made during this call, including in the question-and-answer session at the end of the call, may include forward-looking statements, including statements of financial projections and future performance. All of these statements that relate to our beliefs, plans, expectations or intentions regarding the future are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and are based on our current expectations. Actual results may differ materially due to a number of risks and uncertainties such as competitive factors, difficulties and delays inherent in the development, manufacturing, marketing and sale of software products and related services, and general economic conditions. For a discussion of these and other risks and uncertainties affecting our business, please see the risk factors contained in our annual report in Form 10-K and our most recent quarterly report in Form 10-Q and our other SEC filings and in the cautionary statement contained in our press release and on our website. The company undertakes no responsibility to update the information in this conference call under any circumstance. In addition to development and timing of any product release as well as well as any of the features or functionality remain at our sole discretion. Our earnings press release was issued over the wire services earlier today and also has been furnished to the SEC as an 8-K filing. The press release is also available on our investor relations website. On this conference call, we will provide non-GAAP financial results. A reconciliation between the non-GAAP and GAAP measures can be found in table four accompanying the press release and posted on our website. This conference call is also being recorded for replay and is being webcast. And archive of today's webcast will be available on our website following the call. I will now turn the call over to Bob.

Thanks, Mike. Good morning, everyone, and thanks for joining our fiscal third quarter FY17 earnings call. We achieved solid third quarter financial performance, which was highlighted by a 10% sequential license revenue growth, validating our continued business momentum. We were able to achieve these results in spite of the negative impact from FX and both license and service revenue. Brian will elaborate on the FX impact later on in the call. Let me briefly summarize our Q3 year-over-year financial results. Software revenues were up 8%, total revenues were up 7%, EBIT margin was 12.7%, EPS was $0.28 per share, and free cash flow was $24.4 million, up 76%. The highlights for the quarter were we had outstanding sales execution, with strong year-on-year international growth. We had excellent growth in a number of enterprise customers tied to their journey to the cloud, which includes managing data with our CommVault data platform solutions on-premise, in the cloud, in hybrid environments and migrating it to and from the cloud. We experienced good growth for our standalone solutions in the mid-market and in the enterprise and we continue to have a healthy sales funnel, which puts us in a good position heading into Q4 2017. Our results this quarter were due to a number of factors including our industry-leading technology and services, increased uncertainty in the competitive landscape, and outstanding sales execution. Our standalone solutions are showing strong demand, particularly from mid-market customers. During calendar year 2016, the number of petabytes of data being stored using the CommVault software within public environments increased by 250%. We have made good progress on the key elements of our short and long-term strategic initiatives, while we have some challenges in our business, particularly in regard to operating margins. We believe we are on course to achieve our…

Thanks, Bob. And good morning, everyone. I will now cover some key financial highlights for the third quarter of fiscal 2017. The strengthening of US dollar compared to certain foreign currencies had a significant impact on both the year-over-year and sequential revenue growth for the quarter. Q3 total revenues were $165.8 million, representing an increase of 7% over the prior year period and 4% sequentially. On a constant currency basis, total revenues were up 9% year-over-year and 6% sequentially. We reported software revenue of $77.3 million, which increased 8% year-over-year and 10% sequentially. On a constant currency basis, software revenue was up 11% year-over-year and 12% sequentially. Revenue from enterprise deals, which we define as deals over $100,000 in software revenue in a given quarter, represented 57% of software revenue, resulting in a 15% year-over-year increase. The number of enterprise deals increased 22% year-over-year. Our average enterprise deal size 6% year-over-year and 2% sequentially to approximately $261,000 during the quarter. From a geographic perspective, Americas, EMEA, APAC represented 56%, 32% and 12% of software revenue respectively for the quarter. On a year-over-year growth basis, the Americas was flat and EMEA and APAC were up 23% and 17% respectively. EMEA software revenue was up 32% on a year-over-year constant currency basis. The revenue mix for the quarter was split 47% software and 53% services. Please remember services revenue is a combination of both maintenance revenue and professional services revenue. Services revenue for Q3 was approximately $88.5 million, an increase of 5% year-over-year and flat sequentially, which is consistent with our comments on the last earnings call. Our maintenance and support renewal rates remained strong and our maintenance pricing realignment process is tracking well. We added approximately 600 new customers in the quarter. Our historical customer count is now approximately 24,000 customers.…

Thank you, Brian. CommVault is the only company in the industry with an enterprise data platform that is available today, which enables customers to address their key strategic issues across the data center and into the clouds with one holistic, fully integrated index platform. We've integrated the ability to embed the contextual understanding of data being managed through comprehensive dynamic indexing and securitization combined with software defined infrastructures and leading copy data management capabilities that natively extend into the cloud for active data use cases. We can do this across all infrastructures and what some industry pundits are now calling the supernova, with applications and data spread across on-premise, colocation, hosting and the cloud. Gartner says IT leaders must apply an enterprise-wide strategy in this regard, a requirement for which CommVault is uniquely suited. These capabilities enhance our competitive position versus our legacy competitors and provide best-in-class, more comprehensive scalable solutions versus new niche competitors or silo tools in the market. Many customers and industry experts have now come to realize that you cannot truly manage data unless you have a comprehensive understanding of that data and combine that understanding with seamless data portability, so that it can be used in different locations and forms as compared to blind, single-use copy images. As I mentioned earlier, CommVault continues to outpace the market with a robust pipeline of product innovations. The new products and services we are launching this quarter and throughout FY 2018 address the big strategic needs of our customers, including the journey to the cloud, natively extending infrastructure and applications into and across cloud environments, modernizing IT infrastructure, placement of legacy infrastructures with modern lower-cost clouds scale-out infrastructure, addressing the scarcity of IT resources through simplification and automation, securitizing and controlling access to critical data, and lastly, the…

Thanks, Bob. Operator, can we please open the line for questions?

Thank you. [Operator Instructions] Our first question comes from Joel Fishbein from BTIG. Your line is open.

Good morning, guys. And thanks for the color on the constant currency. Just a question on the business in the Americas. Bob, you mentioned the good execution. I was curious about the close rates and any changes at all in the competition considering the business was flat year-over-year, that would be helpful. Thanks.

Yeah. It was just – the Americas basically had a really good solid quarter, Joel. The issue in the Americas was just their large deal, the megadeal close rate which will bounce back in the March quarter. So, there is nothing fundamental there. No increased loss to competition. This was just, I would call, a big deal lumpiness, but is there is no color competition. We still are gaining position in the Americas against our legacy competitors. And as I said on the call, we did have good performance on our stand-alone solutions, particularly virtualization and we’re about a whole series of new products that will strengthen both our enterprise and midmarket position. So, in fundamental terms, the Americas is in good shape.

That’s great. And then just as a follow-up, just any color on AWS and Azure in terms of the pull-through [indiscernible] any color there as well.

Well, when you look at our internal numbers, in both cases, we've had strong pull from both AWS and Azure. The pull from AWS has been stronger, so there's a higher percentage of customers’ data in AWS, but I will also say that we are gaining a lot of momentum and traction with Microsoft and Azure. There is really good go-to-market cooperation between the two companies. So, we feel really good about that as well. And as we go into later this quarter, you'll see us provide a whole series of new solutions for the Oracle cloud as well. So, that will become a positive factor for us.

Thank you. Our question comes from Aaron Rakers with Stifel. Your line is open.

Yes, thanks. I want to kind of build on that that latter question, you’ve talked about broadening strategic partnerships, you’ve talked about leverage in your distribution channel. As we look at if it's Microsoft, Amazon, Cisco, now it sounds like Oracle, do you continue to see – how would you characterize your engagement with even further expanding partnerships, either be it the likes of distribution partners or even more strategic infrastructure/cloud partnerships?

Well, beyond the ones you just mentioned, Aaron, there’s a lot of work we’re doing with the global systems integrators. So, the global GSIs are becoming more and more major factors in driving revenue because they’re controlling a lot of these major products, whether it’s infrastructure migration to the cloud or new application deployment. So, if you look at AWS, Microsoft, Oracle, and then the big global GSIs, those are all kind of new areas of distribution leverage for us. We’re also putting a lot more focus and effort in our service provider customers, which Al can talk about here in a second in terms of improving our position with them. In addition to that, we've gotten a lot of traction in our healthcare vertical with new partners, such as Epic in healthcare. So, healthcare is a high growth area for us. In addition to that, in international, we clearly enhanced our partnership, for example, with Huawei and many parts of the world. Al, do you want to just take a second on…?

Yeah. I think also, Aaron – I think Bob nailed that pretty well. I was going to comment even to Joel that just a little taller on the GSI side, we had a major system integrator partner in yesterday. And what's happening with these guys, Aaron, is they’re developing practices around and consulting activities strictly around – in this case, going to AWS. And, of course, our play within that is now what are the implications for data management. So, we’re seeing more of that, to Bob’s point, across a number of those SIs. And our play there is to get involved in them. And then, his point on service providers, and you know this, but more and more service providers are moving off the old hosted model and/or infrastructure model to more of the management model and they’re actually using cloud infrastructure and/or open infrastructure, if you will, for the core hardware platforms that a lot of their activity is focused on. So, you’re seeing a real – I don’t want to overuse the term convergence, but you’re seeing a real convergence of SIs, cloud providers, service providers, even major resellers with programs all focused around this thing we call cloud.

And then, as a quick follow-up, is there any framework? I know 250% growth in petabytes managed of data into public cloud, how big would you say public cloud is as either a percentage of your software business or as a percentage of the total petabytes that, you would say, manage under the CommVault platform.

We think that it is a very small percentage of our managed petabytes at this stage. I have seen industry factors that they’re somewhere around 7% adoption out there. Again, I'm not burdened with any facts [indiscernible], but I think we’re at the very early point of adoption here.

And percentage of revenue?

In percentage of revenue, it is very, very material because almost every one of our big enterprise deals has a cloud component attached to it. So, even though that – you have some customers that we've mentioned publicly. We just mentioned Dow Jones who may have half their data going to the cloud or, in some cases, all of it going to the cloud. But almost every customer has some component, Aaron, going to the cloud. So, cloud is strategically relevant. And I’d say, for the sake of argument, well over 90% of our enterprise deals. I could say 100%, but it’s certainly well over 90%. And if I look out over the next year or two in terms of data that we would be managing, it would be certainly well north of 100 petabytes and it may be double that over the next year or two, to give you some direction in terms of size of – or the amount of data that we’re starting to manage in this public cloud.

Thank you. Our next question comes from Jason Ader with William Blair. Your line is open.

Yeah, thank you. A couple of questions for me. First, Bob, I know you mentioned you're comfortable with the consensus estimate for the March quarter. Just trying to understand kind of Q4 seasonality on the software side. How do you kind of look at that historically? Right now, it looks like consensus is up about 4% sequentially on the software side. I know there is some FX probably as a headwind in there. But how do you think about – like, what’s a normal sequential growth rate for your software business in your fiscal year, especially because it’s your fiscal year-end and you would expect sales guys trying to close those big deals?

Hi, Jason. It’s Brian. Maybe I’ll take that one. In terms of – I don’t know if there is any set, firm seasonality percentage we could put on it, but we did say that our services will decline sequentially in fiscal Q4 as expected. And therefore, some of that – if we’re firming, total revenue is going to have to shift to the software line. So, if you model that appropriately, that’s where it should shift to, while keeping the consensus total revenue where it is.

Okay. So, the decline would what, in the services revenue in the kind of $2 million range? Do you have any kind of specificity there?

We’re not going to say what number it is, but it would decline.

Okay. And then, second question, this is, I guess, probably for you, Brian, as well just on the leverage. 100 basis points expansion for fiscal 2018 and I know that you have some headwinds from the services line, but if you’re going to grow your software revenue kind of strong double-digits, as you said, I guess I’m a little surprised that you’d only be able to expand by 100 basis points and what are some of the other factors involved here that are not creating more leverage?

The biggest issue is maintenance. You just can't get around it. When you have the maintenance running flat, it is just very hard to get operating margin expansion. We’re trying to, from an investment standpoint, our goal still to get our license revenue growth in a reasonable period back north of 20%. And so, what Brian said on the call, we are controlling expenses, so we can get very strong op margin expansion in the second half of 2018 and we’re controlling it without having a significant impact on license revenue growth. But that overrides every issue. You had some op expense, given the depth and breadth of the business, and to these new market and distribution areas we’re moving into. But I can tell you, more than anything else, maintenance is the issue on op margin expansion. Once that comes in line, you'll see a lot of leverage in the business. That starts to happen in the third quarter of FY 2018 and really start to accelerate in the fourth quarter. And that’s where the leverage in the business is. That, combined with a fair amount of sales force productivity we set ourselves up for in FY 2018 drives your op margins. Those two areas.

Do you expect to hire at a slower pace going forward?

We’re slowing it down from planned levels. That’s what we’re doing. We’re reallocating resources and we’re slowing it down, so we can we get our financial model in line here. Because once the – I think you'll see good solid license revenue growth. And once the maintenance line swings around, then you’ve your operating leverage that and sales force productivity. And sales force productivity [indiscernible] whole number of elements in terms of how do you drive that. So, we’ve got that pretty well positioned right now.

Okay, thank you.

Thank you. Our next question comes from Abhey Lamba with Mizuho Securities. Your line is open.

Yeah, thank you. Bob, just continuing on your comments about margins, so given your commentary that it’s tied to maintenance and productivity enhancements down the road, should we expect greater margin expansion beyond fiscal 2018? As we get into fiscal 2019, should we be looking for higher than 100 bps of expansion?

Absolutely.

Okay, great. And going back to earlier comments, Bob, your compares are getting tough starting with the next couple of quarters, and can you talk about the different growth drivers that can help you accelerate your software license revenue growth to double digits?

Well, it has been. The major factors, if you think about why the company has returned to growth, it's been our V11 platform, our data platform and journey to the cloud, combined with good solid growth in our standalone virtualization solutions and much better sales execution and higher sales capacity. That's what’s got us this far. Now, going forward, we’re going to do a number of things. We’re enhancing our data platform relative to competition, including software-defined data services which is pretty – it’s a significant deal and we’re coming at the end of the early release. So, come next quarter, that will be in full release. We’re enhancing our and doubling or tripling the number of standalone solutions that are monetizable out there with new Web-based UIs just to make it easier for customers and channel partners to drive it. So, you've got expansion on the top end of the platform, you’ve got significant increase in the number of products with, I’ll call them, modern Web-based UIs attached to them, which should make it easier. We’re trying to take away all the barriers in terms of doing business with CommVault just to make it easier to work with us, including new pricing models. Now, add to that, things we’re doing in healthcare. And then, come this fall – and this is not trivial – the enhancements to the platform from the standpoint of business and analytics and process automation is substantial, including new advanced search capabilities. So, we’ve got ourselves well positioned to open up lots of market, increased competitive position against legacy competitors that there won't be a niche competitor out there from a best-in-class standpoint that’s going to cause us – we will lead across all these high growth niche markets with standalone solutions and we’re expanding distribution. So, those are all in place. Now, it’s just making sure we execute like hell. And as a team here, we’re working with alignment and focus to improve our execution. So, think of CommVault making a transition successfully, which we did in our phase two of that too, leverage off of that and to another phase of growth. And all the foundation points for doing that are in place as we speak.

Got it. Thanks, Bob. And my last question is, your commentary about funnel, how should we think about your funnel, heading into this quarter versus last year and the last quarter? You characterized it as healthy in your prepared comments today. And on the last call, you had called it, we have the record levels. Just trying to see where we are sequentially and on a year-over-year basis.

It’s definitely up. The key to it – and I can tell you right now – is big deals. We’ve got a lot of them. And if we have reasonable big deal close rate, we’re going to have a really good solid quarter. That’s where it is.

Thank you.

Thank you. Our next question comes from Alex Kurtz with Pacific Crest Securities. Your line is open.

Yeah. Thanks, guys, for sneaking me in here. Just a quick follow up on the big deals, Bob. Could you see point next year, maybe even exiting fiscal 2018 where you’re approaching $300,000 for your enterprise deals? Then my question is really about some of the changes that we are hearing about from Dell EMC in their kind of SMB midmarket business that could be happening right now and how you guys plan to execute against those changes in the marketplace?

Dell EMC is a formidable competitor. But when you get into both the midmarket and enterprise with, what I call, modern data protection in terms from a technology standpoint, I think we’re way in front of them. Now, from a distribution standpoint and with things like the Flash storage and things like that, that’s where this thing is going to grow. But I'll let Al comment on core technologies when you get into federating, managing data into the cloud, which they are weak there. Their core legacy storage is causing customers a lot of problems. And they’re not in a lot of – what I would call the leading high-growth areas of the standalone markets. Al, why don’t you comment on that?

Yeah. I think like Bob said, they’re formidable, especially on reputation and brand awareness and strategic and/or just volume muscle. And as he was relating, there's lots of holes in the product line. But the big one that we always see is being able to manage across legacy apps and infrastructure into a highly-virtualized environment; and in their case, way beyond VMware. You have to get into the open stack world. And then, all the way to new infrastructures, not only converge type or converge and, obviously, public cloud and a number of their solutions end up fairly siloed and, again, they will muscle their way through it just in terms of big company, but strategically and technically we feel like we are in a really good place against guys like that. And, again, we realize it isn’t just a technology battle there with guys like that. So, as Bob said, we’re putting a lot of effort into our go-to-market motions, our packaging, our positioning, our messaging, our pricing, et cetera, to try to counteract those kinds of threats out there.

Thanks, Alan. And just real quick on the opportunity of getting enterprise deals over $300,000 over time, just how do you guys think about that?

Well, it’s two things. Yes, it’s your million-dollar deals, your million and multimillion dollar, but it’s also the number of the deals. So, we’ve had quarters where our ASP may go down because the number is high. We’ve had our good solid number of seven-figure deals as well. So, that is not something – the ASP on that is not something we focus because that’s a number issue. But we certainly are focused on these big seven-figure deals. So, I’ll make another point. Brian mentioned it, but this is pretty significant. The new pricing, the new accounting standards allow you to mix perpetual and subscription. And when you get into software-defined structures where somebody's going to be buying on term or you are going – someone has our platform and you are going to start delivering SAS-type solutions on top of that, if we can adopt the new accounting standard, it gives it a lot more flexibility in driving the business and driving larger deals. So, our financial team is doing everything that they can to make sure we’re positioned to do that, even though we’re not quite there yet. But that could really help this company accelerate big deal growth if we can get in position to do that next quarter.

Thank you. Our next question comes from Michael Turits with Raymond James. Your line is open.

Hey, guys. Two questions. First on margins, then on deferred. On margins, I know, Bob, you said that primary impact to fiscal 2018 margins was on services. But I’m not sure, but it doesn't seem like your services outlook actually changed that much. You thought it was going to be bad. So, what actually changed besides currency that brought you down a point into 2018?

Michael, this is Brian. So, we never talked about 2018 specifically until now. In terms of the three major headwinds, we talked about FX, we talked about lagging services and we also talked about the investments we have made in FY 2017 to drive strong double-digit software growth in FY 2018. So, it’s those three things combined which would drive…

Michael, we haven’t brought 2018 down. We haven’t talked about it before.

So, in terms of margins, well, let’s say, at least relative to Street, and I guess you can’t control that, but Street was a bit higher at almost 2 points of margin expansion than you guided to.

Well, because the Street had too much maintenance growth in their model.

And also, they were factoring in current FX.

Got it, thanks. And then just on deferred revenues, the deferred revenue was strong – a little stronger on the long-term side than on the short-term side. Anything happening there in terms of duration extension?

This is a positive from our perspective, is that as part of our maintenance repricing processes that it has led to longer-term arrangements with customers. And we view that as a positive as we get into the back half of FY 2018 and, hopefully, see the resurgence in the services revenue line. That long-term deferred is going to help us.

Okay, great. Thanks for the clarification.

Thank you. Our next question comes from Stephen Bersey with MUFJ Securities. Your line is open.

Hey, thanks, guys. Maybe just an update on how you're feeling about your progress within the healthcare vertical and maybe how that experience is shaping up your views towards other opportunities in other verticals.

We've seen substantial growth in healthcare, primarily as we integrated with the companies like Epic and it’s a source of our big deal growth as well. So, we have overachieved our objectives there and we will continue to expand the healthcare vertical and we are going into – as we move into these other technologies, including business analytics, we will have a much sharper vertical focus on the business moving forward.

Got it. And maybe just on the pipeline one more time, so are you seeing any changes in some of the metrics that you track on the pipeline? For instance, velocity of deals through it, whether they’re slowing down or increasing, deals dropping off or getting added on, any change in those metrics?

I believe we have really comprehensive – we look at pipeline eight ways from Sunday. And we are in a – you’ve got to look at what your pipeline drivers are. So, in the past, they were – this whole move to the cloud definitely accelerated pipeline. Our virtualization accelerated pipeline. And what we’re doing now is dramatically broadening our product lines. So, when we go out over the next few weeks, both at the enterprise level and in the midmarket, we’ve got a whole series of engines now to accelerate momentum on top of the momentum we've established already. So, the answer is yes. We look at it eight ways from Sunday.

Great, thanks. Well, sounds like some great products coming out and we’re looking forward to it.

Us too.

Thank you. Our next question comes from Srini Nandury from Summit Research Partners. Your line is open.

All right. Thank you for taking my question. Bob, can you provide some color what's happening with Europe. You grew it faster than the overall market. So, what's going on there?

We’ve had new leadership in Europe, both at the theater level and in some of the major markets over there. And that team has just done a great job of execution. So, we’re just in a much stronger position than we were a year ago. And it’s just the – we’ve just strengthened our opposition both in the enterprise and the mid-markets over there and that will continue. Our new theater head over there has done a great job very quickly and strengthened position in core markets like Germany, which we were weak, now we’re strong, for example. Northern Europe has been doing really well. Our new-put [ph] team in the South, which was flat, has seen really good growth. So, it’s, I would call it, sales execution, just much better organization and focus. And as a result, we've gotten good results.

I think just to add to that is that some of the maintenance pricing realignment has impacted EMEA favorably and you also saw that in the uptick in the number of new customers that we added this past quarter, which a good chunk of that was coming from Europe.

Thank you. Our next question comes from Andrew Nowinski with Piper Jaffray. Your line is open.

All right, thanks. Can you guys just give us any color on the silent growth of your subscription based products this quarter?

I’d say, Andrew, to date that – subscription has flattened out. And that is why we’ve been working, in fact, almost a year now, on a whole series of new products, service level – service provider programs and new pricing models. I am confident that that will turn, but I don't think you'll see the turn in that product for another couple of quarters. It takes another couple of quarters. And I think we’ll see a resurgence in growth. I think what’s happened there with us, anyway, is that a lot of our customers went to the cloud instead of the service providers and a lot of our service providers changed their models to be kind of MSP – managed service providers into the cloud, so we had a mix shift. And where we’re going next is some different areas in terms of subscription which will be a lot broader. So, it’s going to be significant, but you'll start to see that tick-up. I think it’s about two quarters, I think, as these models get into market.

Thank you. And our next question comes from Eric Martinuzzi with Lake Street Capital. Your line is open.

Thanks. Product question. November 2017, the new major product. Typically, that’s the productization of customizations that you’ve done for some your bigger users, specifically diving into business analytics and in the process automation side. Can you give me an example, one on each, of what that product will do that your current product doesn't do or do better, that the current product doesn’t do well?

That’s a mouthful. Al, why don’t you take it right from search.

Let’s just keep it on that, right.

I’d say search, Data Cube and maybe some of the embedded machine learning.

Yeah.

We’ll try to keep this short because it’s massive.

He’s right, Eric. So, our way of thinking here is to productize, and that’s the share of the activity going on between now and next fall, but productize not only search, which we've had for some time, but there are a number of improvements we can do in there. And, of course, we’re using some open source engines out there to do that. But, really, as Bob said, we’re working with a couple of partners on integrating and machine learning or AI kind of hooks into a content index repository, if you will. So, now, you can start posing those questions. And a real simple example is Google doing – instead of searching on flights for tomorrow, just ask him what's the best flight for me to take tomorrow or later today from Newark to San Francisco. So, now you’re taking search and tying it together with some intelligence there. And from a number of standpoints on a number of examples of what we do out there, again, we’re focused on making sure the foundation is there, the repository is there, it's all-encompassing. It goes across everything that we can call to, everything that we’ve touched, everything we’ve indexed. So, it’s quite comprehensive. And then, like I say, working with a number of providers – and a good share of this, by the way, is open source tools out there. So, hopefully, that gives you a little bit of color. But it’s – I would say, between now and then, it’s almost more of a productization and solutionization than an issue then – and some finishing out the technologies. But it’s a hardcore development activity.

[indiscernible] relevant to the entire customer base or just kind of power users?

No, it will be across – think of the back end. We’ve talked about having a single repository for our customers in clouds and endpoints, different data centers. So, they are dealing with things like compliance and legal. Now, we’re going to turn that back in into a big database. Think of it now as a big relative database in the back end. We have – we’re making it easier for third parties to develop applications. So, that’s your API automation is significant. And then how you triage and you report up the information that comes out of these analytics that Al was talking about that we’re embedding a lot of analytics capabilities into it. And when he is talking about searches, when you are going across clouds and machines and everything, how do you find out contextually what is relevant to move into an analytics engine. It’s a very complex process. And you can't just do it in a cloud, you’ve got to do it across these different repositories. So, we built those capabilities to go out and find relevant data that could be analyzed and then you can tie that to many different analytics and search capabilities, some of which will be embedded in the platform and some of which we’ll provide hooks where we’ll reach out to different analytics to provide results and then present this in some really slick graphical way to the user. So, there is a fairly substantial amount of enhancements that go along with this to make this work and then tie that to different verticals and use cases. So, that’s what we plan to do come November. You may see some of this come out to market earlier. So, clearly, from a platform standpoint, we plan to introduce this in the fall, but some elements of this may come out in the summer.

Thank you. And our next question comes from Adria Liguvich [ph] with Jeffries. Your line is open.

Hey, guys. Yeah, this is Adria Liguvich [ph] on for John DiFucci. I just had a quick question on sort of competitive environment. You still have some of these legacy incumbents going through their own restructurings, but you also have some newer private guys coming from a virtualizing cloud sort of perspective. Can you maybe just give us an update on the sort of puts and takes of any updates to the competitive environment?

So, our view is that we continue to gain relatively to the legacy guys. And when you start to look at some of the new guys coming in, whether it's in software defined or copy data management, our view is, come this quarter, with our standalone solutions, we don’t see a niche start up competitor out there that we think is going to be an issue. We think we’ll be well beyond the new guys coming in. You still have VM out there and they’ve got momentum in virtualization. We don't see – we see them here and there in some of our big accounts. We’re starting to take them out in some major accounts now as they run into some of their federation and scale issues. But I would say the issue is not – is more execution on the CommVault side here than competitive threat. This is in our hand here to execute. So, Al, I think…

And again, back to the core concepts that Bob and Brian were talking about today, is we’re seeing a huge uptick again in enterprises primarily. And enterprise is interested in being able to manage data at a broad perspective across their wide-flung infrastructure which includes anything from [indiscernible] data centers to hyper-converts to private to public to highly virtualized environments. And back to Bob's point, most of the startups are the younger guys out there, we watch them. They have some interesting technologies. But, in general, they stay at the very low end of the market or siloed in. A lot of converge guys around BDI, you’ve got at this point. And a lot of the broader scenarios is kind of talk. So, we, of course, need to make sure they don't expand greatly beyond there, but I’d agree wholeheartedly with what Bob just said, is – particularly, in the midmarket up to enterprise, we feel confident in our positioning at this point.

The scale issue, by the way, we were dealing with terabytes, now we’re dealing with petabytes. That scale is going to go up by 1000x here really quickly. So, positioning ourselves for a massive shift in scale on this market, which will happen. So, if you're not thinking – 1000 petabytes now and then think of another 1000 on top of that, that’s a yottabyte. You’re not thinking in those kind of terms. Well, your petabyte, exabyte, yottabyte, and that sequence – we believe that’s going to be another shift in the market that will take place over the next couple of, three years.

Ladies and gentlemen, that concludes our Q&A session. Thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.