Good day ladies and gentlemen, and thank you for standing by. Welcome to the 8x8 Fourth Quarter and Year-End Fiscal Year 2013 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 be given at that time. (Operator Instructions) As a reminder, this conference is being recorded. I’d now like to introduce your host for today Ms. Joan Citelli, Director of Corporate Communications. Ma’am, please go ahead.

Thanks and welcome everyone to our call. Today, I’m joined by 8x8’s Chief Executive Officer and Chairman of the Board, Bryan Martin; and 8x8’s Chief Financial Officer, Dan Weirich, to discuss our results for 8x8’s fourth quarter and full fiscal year 2013 ended March 31, 2013. If you have not yet seen today’s financial results, the press release is available on the Investors tab of 8x8’s website at www.8x8.com. Following our comments, there will be an opportunity for questions. Before I turn the call over to Bryan, I’d like to remind all participants that during this conference call any forward-looking statements are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Expressions of future goals, including financial guidance and similar expressions, including without limitation, expressions using the terminology may, will, believe, expect, plans, anticipates, predicts, forecasts, and expressions which reflect something other than historical fact are intended to identify forward-looking statements. These forward-looking statements involve a number of risks and uncertainties, including factors discussed in the risk factors sections of our annual report on Form 10-K, and our quarterly reports on Form 10-Q and in our other SEC filings and company releases. Our actual results may differ materially from any forward-looking statements due to such risks and uncertainties. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after this conference call, except as required by law. Thank you. And with that, I’ll turn the call over to Bryan Martin, Chief Executive Officer and Chairman of the Board of 8x8.

Okay. Thank you, Joan. Welcome everyone to 8x8’s earnings call for the fourth quarter and fiscal year ended March 31, 2013. I’m going to begin by providing an overview of the quarter and full-year, which will be followed by Dan’s discussion of the financials in greater detail. We’ll then be happy to answer any questions you may have for us today. 8x8 completed a banner year for our cloud-based business communication services. Revenue from business customers was up 32% year-over-year and total revenue increased 25.4% to a $107.6 million for the year. Non-GAAP net income was also up 42% year-over-year and non-GAAP net income as a percentage of revenue increased from 12% in fiscal 2012 to 13.6% in the fiscal year we just completed. During fiscal 2013, we more than doubled our cash, cash equivalents and investments to $52.3 million with no debt on the balance sheet. This was driven partially by the gross margin expansion we achieved this year, closing the year out by hitting our goal of service gross margins at 80% for the March quarter and overall gross margins for the quarter over 70%. These are GAAP margin figures. These margins are also the highest margins in 8x8’s history as a service provider, and they’re far more representative of those posted by Software as a Service or SaaS model based companies rather than the margins posted by the traditional telecom providers we compete against. As illustrated in the first line of our key metrics table at the end of today’s press release, we sold more new subscriptions during the March quarter than at any time in the Company’s history with 50,728 subscribed services sold for the quarter. This number accelerated throughout fiscal 2013 with approximately 41,000 new subscriptions sold in the June quarter, 43,000 new subscriptions in…

Thank you, Bryan. For the fourth quarter of fiscal 2013, revenue from business customers increased 23% from the same period a year-ago and represented 97.6% of total revenue. Service revenue represented 90% of total revenue. There was no revenue related to our partnership with SoftBank recognized during the fiscal year. Gross margin was 71% in the fourth quarter and 68% for the full-year. As Bryan noted, we met our 80% service margin goal in the fourth quarter. I’d like to note that our fourth quarter is a period of higher labor expense related to higher payroll taxes and other fringe related expenses, such as 401(k) matching. Achieving 80% service margins in a period of greater expense is a phenomenal feat and something we expect to repeat. We believe that margins at this level are sustainable even with the global reach investments Bryan mentioned. For the full fiscal year, service margins were 77%, up 44 basis points from the fiscal 2012 figures. Product margins were negative 17% in the fourth quarter and negative 26% for the full-year. Non-GAAP net income was $3.8 million or 13% of revenue compared to $3 million or 12% of revenue in the same period a year-ago and $3.8 million or 14% of revenue in the third quarter of fiscal 2013. For the fourth quarter, non-GAAP net income increased 27% compared to the same period a year-ago and for the full-year non-GAAP net income increased 42% from $10.3 million or 12% of revenue in fiscal 2012 to $14.7 million or 14% of revenue in fiscal 2013. GAAP net income in the fourth quarter was $1.7 million, $0.02 per diluted share and $13.9 million or $0.19 per diluted share for the full-year. Compared to last year GAAP net income was down due to the one-time $62 million non-cash…

Thank you, Dan. For your reference and convenience on the call today, we posted a transcript of these prepared remarks on the Events & Presentations section of 8x8’s Investor website at investors.8x8.com. With that, we’ll be happy to take any questions you may have for us today. Karren go ahead and open the lines.

Thank you. (Operator Instructions) Our first question comes from the line of Dmitry Netis from William Blair.

Congratulations guys on an excellent quarter.

Thank you very much Dmitry.

A couple of questions. On the revenue side, have you recorded any non-recurring engineering expenses from your SoftBank relationship?

No, there is no revenue in this quarter we just reported the entire fiscal year, we just reported related to the SoftBank relationship.

And the follow-on would be, do you expect to record any NREs and what quarter will we see that?

Yes. SoftBank has indicated to us that they intend to announce the product and solution at SoftBank World, which is the third week of July, and we expect that sometime around that point, the product will be live and we will be able to start recognizing revenue. We are still finalizing how the accounting will work for the transaction and most likely the NRE component will be amortized over the life of the agreement, so there wont be like a big massive [slug] of revenue related to the NRE.

Okay, got you. That’s very helpful. And could you sort of give us a sense of the size of the opportunity with SoftBank. I think you said it might be a three-year contract, can you sort of refresh what should we be expecting in terms of potential revenue coming from that relationship?

On the customer size, once we began recognizing revenue, the customer will be a top 5 to 10 customer of 8x8 in terms of recurring service revenue that we’re recognizing from the customer. The Company’s largest customer today bills extremely low six figure amount and we have kind of our top 10 is kind of in the – roughly like 50,000 to 100,000ish range. And Dmitry the initial term of the agreement is 36 months.

36, okay. Very good. Thank you. And then on the ARPU, you guys came at $263 this quarter, this is only $3 higher than last. I think you were averaging $4 to $5 maybe even $6 in some quarters. What drove sort of a – is it related to kind of the smaller [PBX] customers signing on versus the bigger customers or – I mean, what sort of drove kind of a less than expected jump here in ARPU and what should the expectation be going forward?

Yes, the ARPU increased $3, if you look back. Over the past year it’s increased roughly $4 to $6, each of the preceding third or fourth quarters. The primary reason that it was down is we had a large revenue churn then that we discussed last quarter, in our December quarter and some of those customers we recognized revenue from earlier in the quarter so like October, November time period and that kind of spreads across our average revenue per customer in the prior quarter. So, its about a $1.50 or so kind of headwind that we started with related to the larger revenue churn and so, if you just look kind of how we get through the quarter from January down to March, I’m not really too keen on like dissecting a quarter and months, but in this instance I think its helpful. But we actually started January. We have lower average revenue per customer than we reported for the entire December quarter. So we were kind of in a deep hole and we came out of it pretty solid. So, we expect that the historical figures that we’ve been putting up will be repeated in the future and we just reported 1.5% revenue churn, which if you look at it on a full-year basis over the last couple of years, its noticeable lower than what we’ve been putting up from the revenue churn on a full fiscal year ’12 or ’13.

Right. Okay. Okay, that’s very helpful. And I guess, the last question is growth snapback nicely from 2,600 to 2,800. What do you guys think will happen next? Are we to expect basically a flat growth additions or do you expect the rise in growth additions going forward, given the sales changes you’ve made a couple of months ago?

Yeah. I mean, we’ve added a line to our selected operating statistics table, which you can find on the second to last page of the release. And the line that we’ve added and we’ve actually reorganized this table a little bit. We received a lot of questions after we announced our numbers in January, and we tried to put this in a format and added the second line to help investors kind of visualize what's occurring. But the second line is called, number of new services sold to the aggregate number of subscription base services that we sold in the period, and as you can see it's 50,728 in this most recent quarter. And I can just tell you that a quarter ago I wish we added this in, because we spent a lot of time talking about why gross adds declined by 298 between September and December. And as you can see from this that we actually had subscription increase that we told in for recurring revenue that we sold increased. So, the primary metric that we believe in that you should focus on is the number of services that we’re selling, so we’re selling to larger and larger customers that are subscribing to more and more services. And when we say larger and larger customers, we’re just saying that like the average or the mean is kind of moving upwards. I’ve had people ask me, did you sign like a big 10,000 [seat] deal in the December quarter that drove you up to 17 and no, I mean we didn’t sign any that are more than 500 essentially just all like, we’re selling a lot more like 300 or 400 extension opportunities that’s kind of driving the average up. And so we think that a much more important figure to focus on is just is the number of services sold, and we’ve been effectively flat on gross adds for a few years now, and we’ve been in this kind of like just below 3000 range for a long, long time. And the indicator’s to look at is; what do we bring in, in the door and the size of the new customer and how is it kind of flowing through into ARPU expansion. Yeah, and as we noted just add one point on that Dmitry, in the prepared remarks we pointed out the parallel between the growth rate of that new multiplicative number that we’re providing there it was up 29% year-over-year. Our revenue from business customers over that same time period was up the identical amount. But if you look at the gross adds over that year you don’t have the same amount. So, it's a much more precise number that to really measure our growth by.

Okay. I just want to understand a couple of things; one, you said that number was up 29% which is your, I guess you’re referring to your total subscription number which was up 29%, but I think you’d said the revenue from business customers was up 23%, am I reconciling this correctly?

Yeah, those figures are correct. So, the number of new services sold are 29%; so that’s just that 50,728 divided by the 39,229 and the overall revenue from business customers is up 23%.

Okay, which is comparable to your prior quarter 22%, is that correct?

Yes.

Okay, very good. Thank you so much and I’ll cede the floor.

Great. Thank you.

Thanks, Dmitry.

Thank you. And our next question comes from the line of Barry McCarver from Stephens.

Good afternoon guys, good quarter.

Hi, Barry. Thank you.

Curtaining along the lines of sales and growth in the customers here, you talked a little bit about channel partners and the middle market team, separating that out could you talk specifically about sales productivity for the rest of your direct sales force, obviously you had a good co-quarter with customer adds in services. How much can we attribute to that direct team, how they’re performing, what are your expectations for that team in the next several quarters?

When you say our direct team, are you referring to our kind of traditional inside sales group?

That’s exactly right, yeah.

Yeah, okay. So they performed well in the quarter that we just reported that they did a -- performed much better than the December quarter as we had communicated we made some changes in that organization continuing to make changes in that organization with the appointment of Ben Taft to run it recently and as Bryan mentioned it's a majority where our focus is coming to these days or on in this group because it represents still the majority of the company sales, I mean our channel and middle market group is doing exceptional, but still this represents 20% of the total sales in the group.

And any indications, I guess so far of what Ben may attempt to do with that team; is there a change in headcount there or anything specific you’d share?

I think it's too early to be fair to Ben, Barry but I do, I mean I think our goal there is to really – our end goal is to scale that. We want to scale that team, orders of magnitude larger than what it is today. And if you look back historically from a headcount perspective it's basically been kind of flat for a couple of years and that’s what we’re frustrated with. So the goal is to really scale the organization, scale the marketing behind it as we’ve been scaling the fulfillment in customer service and kind of service delivery and support functions that I think are continuing to do quite well post sale. And really I think with Ben’s background and kind of the focus that he’s bringing from the perspective of how to scale a direct selling organization that he’s done previously, that’s the end game. It's not something that’s going to happen over night. There’s going to be continued inner refinements and improvements, but I do think hopefully when we look back next, this time next year that we can look back and say yes, we achieved what we wanted to do. But I think quarter-over-quarter it will be much smaller second sounds as we start to turn the ship towards getting that organization much larger.

Okay. And then just secondly in your prepared remarks, you talked about putting capital to use potentially through acquisitions; can you give us a little more color there and I guess the question really is, are there opportunities out there that makes sense that you’ve already identified or is that comment really just kind of broader in the sense of it's something you’d look at, I am curious as to kind of where you’re at in that process.

Yeah, we have certainly identified opportunities. I think we’re still early and looking at some of them. We are going to do the global reach expansion that I talked about in the prepared remark it's regardless of whether there’s an acquisition or another way to put it is, even if there were an acquisition lets say in Europe we would still not change our plans to extend global reach to Europe this year, because we think we need to do that anyway. I think one way to look at it is; the global reach work we’re going to do is going to extend our customers that we have today to be able to cover their employees in those regions and call centers and the conferencing and data capabilities that they need in those regions. So it gives us an enormous potential to up-sell some of our multinational customers and provide them services that we can’t quite do as well today when we’ve only got data centers on the east and west coast of North America. The acquisition strategy is much more about establishing a local presence with feed on the street, sales people support in the same time zone, so that you could really start to build a new revenue stream around locally sourced business opportunities rather than extending kind of our current reach into those international markets. So, if that makes sense that’s kind of the two approaches to it. We’re hoping to do both in this fiscal year. I think the currency and the stock versus where we where a year or two ago. The balance sheet cash position where we were and just the overall fire power that we’ve added recently with SEC filings gives us tremendous potential to do that and so we’ll be looking to execute on that if we can come up with the right deal with the right price.

Okay. And then, I think – just last question, so we’ve already had most of the, I guess all of their traditional the wireline providers report, I heard a lot about weak enterprise spending at least very early in the quarter any pretty sluggish government spending as well. I know government is one and very important vertical for 8x8. Did you guys see any of that; do you want to comment on what you saw in the quarter?

No. I think weak enterprise spending is a macro trend actually drives business our way, I think it helps us. It enables a prospect to take a chance on a brand that’s less well known in the market, go try 8x8 at a location, roll it out, see if it performs as advertised or what they’re peer government agencies and customers are telling them how well we’re doing with them, and I think it works to our advantage. So, I don’t think that’s going to slow us down at all if anything it should help us accelerate. We didn’t, I don’t think the end comment on the economic churn, but we always do monitor kind of business closure and volatility as a result of the economic environment. It was 53% of our total churn just like it's been since the first quarter of 2009. So, we didn’t see any improvement there which might confirm what you’re hearing from some of those other macro trends that, but I think the – I have actually been quite amazed the acceleration we’ve seen in the mid-market as a percentage of new sales. I certainly didn’t think we’d be able to penetrate the market this quickly based on our historical performance in that segment.

Good. That’s good insight. Thanks a lot.

Thank you.

Thank you. And our next question comes from the line of Raghavan Sarathy from Dougherty & Company.

Good afternoon. Thanks for taking my questions. Congratulations on a good quarter. I just wanted to understand the sales and marketing expenses. I looked at the SAC per service it was $92 down sequentially, yet the sales and marketing census are up sequentially. So, obviously you sold more services per customer but are there other expenses other than customer acquisition cost that drove up the sales and marketing. I’m trying to understand the jump in sales and marketing expenses.

The subscriber acquisition cost of $92, I mean you can multiply that times the 50,728 and essentially get the subscriber acquisition cost there, and you can compare it to the December quarter. So, that’s an element of the increase. The rest of it is, is that as I mentioned in my prepared remarks specific to the gross margin side is that the first calendar quarter of any year has higher payroll taxes and we have a 401k plan which is effectively discretionary in the match on what you can put in and it typically it's matched out in the first calendar quarter, that’s a small component of it, but there are two items. But we have been hiring, we’ve been as you can see from our job board on our webpage we’ve got lots of open positions. We’ve been doing more advertising and things of that source. So, we’re seeing an opportunity predominantly in this mid-market group which is defined as 50 or more users and it's reflected in very robust sales from that and extremely marquee names that are signing up for our services, so just kind of like across the board higher spending on the sale’s and marketing front.

So these expenses are not directly attributable to customer acquisition, so overhead expenses, if you will, increased headcount marketing programs?

No, I mean the marketing programs are incorporated into that subscriber acquisition cost so that’s included. The additional variable expenses related to higher sales that we pay to commissions, to our sales force and the indirect sales channels as well as they can increase referral payments or customers that are referring opportunities to us is incorporated into the $92 subscriber acquisition cost. And so, that’s the majority of the increase and so it's just the delta with the, kind of the French related expenses as well as additional hiring that we’re doing in the sales and marketing side. Our sales and marketing line also includes customer service expense, so we have been working to kind of build out more of our customer service management and team to support some of these larger customer opportunities that we’re bringing on. And that expense we do try to provide as much transparency as possible and you can see that even with that increased expense our contribution margin is up a point relative to last quarter and it's up to 64%, the quarter we just reported.

Okay. And then with regard to this global reach initiative, but Dan you mentioned that even with that you’re expecting 80% service margin. So, are these expenses or investments more related to data centers so it's more depreciation expenses as opposed to headcount or I mean how much would be the impact of this global reach initiative on margin?

It is predominantly capital expenditure related expenses and then to a smaller extent it's like we’ll be taking down data center space and some markets that we’re not in today, but the bulk of it is just capital expenditure related expenses and so we’re not just going to hold it like a specific figure of margins but we’ve just stated that we’ve reported 80% service margins and we intend to continue to be there.

Okay. And then in terms of the NRE revenue you had talked about, how much would that be if that occurs, it’ll still be one quarter, you said you’re going to amortize, but how much of that would be?

I mean it's just not like a number that we’re just not going to break out; I mean we’ve given kind of a lot of clarity on that first question about the topic of what it would be.

I’m sorry, it's not clear to me. Did you say monthly six figure revenue opportunity?

No, we just said that our largest customer is low six figures and that the opportunity would be top 5 to 10 customers.

Okay, got it. Okay, and so one final question, so the last couple of quarters the business customer revenue growth was roughly 23%. How should we think about going forward if you don’t want to get into the new share (indiscernible) versus ARPU growth and all the details? On the margin side should we expect inner margin improvement just rate some of the investments you’re making.

So, on the growth rate I mean for the past four quarters, our growth rate is ranged from 22% to 25% and up until the last quarter, we’ve kind of had an apple and orange comparison due to organic and inorganic growth rates, but in a solely kind of organic basis we were in that 22% to 25% range. And we actively were in the middle of it in this quarter that we reported. So, I mean our goal and our compensation and etcetera is targeted on growing the Company, in excess of 20% per year for the foreseeable future and that’s our focus.

Is that 20% is the total revenue or is that business customer revenue?

We’re looking at growing the entire business in 20%, yeah.

Okay, and then in terms of margin how should we think about (indiscernible) discussing specifics but should we expect continued margin expansion given some of the investments here.

Yeah, we’re looking at a situation to where like a year ago for the full-year basis we have a 12% non-GAAP net income as a percent to revenue we're at 14% and the year that we just reported and so, we made a lot more investments in the past year, and we can tell you feel that specifically on the sales and marketing front, we’re going to be making investments and we see a tremendous amount of opportunity out there. I think everyone needs to remember that market for the hosted PBX as well as the host of contact center market is less than 10% penetrated, and it's a tremendous amount of interest to what we’re doing. And the market is growing at a pretty good clip and it is extremely under penetrated. So I mean that’s the reason why we’re making these investments. So, as everyone can see we’ve got exceptionally high contribution margins at 64% so every new dollar revenue that we bring in the door is highly, highly profitable, but if we see opportunities to invest and grow we’re going to make those investments. So I’m not like directly answering your question, but I can just tell you that our compensation plans are based on revenue as well as on profit and we need to be generating profits and continuing to see revenue growth for us to be compensated the way we want to be compensated.

And then one final question, so you had talked of this new metric that’s introduced the number of new services sold that was up 29% year-on-year. So, if you kind of break that down, was that mostly driven by selling into larger customers but you mentioned mid-market customers, so is it driven by selling additional services, any color on what sort of the twist between those two factors?

Yeah, it's primarily driven by selling for our channel and mid-market group is just representing a greater percentage of the total sales and their opportunities are -- they’re getting a little bit larger, but they’re still kind of in there. There primary driver is just they represent a great percentage of the sales.

Okay, Dan. Thank you.

Thank you, Rag.

Thank you. And our next question comes from the line of Jason Kreyer from Craig Hallum.

Hey, good afternoon guy, Jason on for George Sutton. Just wondering if you can talk a little bit about the average subs per new customer that’s really popped in the last two quarters, and I am just wondering if you can give us a little bit more color on that if you think that’s primarily attributed to channel becoming a greater portion of the pie or if you have some gains on inside sales, I am not sure if any of the larger customers come through inside sales or if all that goes through the channel. So anything you can talk to there is appreciated.

Yes, Jason, this is Bryan. I think you can attribute the increase a little bit to both. I think it's driven a little more by, I think going from 6% of our new revenue sold a year ago to 20% today is a pretty significant increase, so a fifth of our new revenue now is coming from the channel mid-market team. To confuse things a little further they actually sell small deals in that group too because if they find a customer that’s through a channel partner that’s very small we’re not going to turn them away. But, I would say the trend we’ve seen in our inside team is larger opportunities coming in the door there as well, so we’re seeing it across the board. I think you’ll just seen if you look at kind of the industry acceptance and adoption of cloud based architectures for business communications and call centers, it's just we’re riding the trend which the industry is beginning to really see that larger customers are seeing this as a sweet spot for their solutions similar to the distributed mid-market customers who have always been a sweet spot for us. So it's across the board we see the growth but again I think a little more coming from the channel and mid-market team in term of the contribution to that increase.

Okay, thanks Bryan. And then on the data cloud we haven't really talked about that for the last couple of quarters and it sounds like there was some nice wins that came out of here, and I am just wondering if this is becoming a bigger focus for you if you’re having more conversations about data cloud?

Yes, so we have announced two customers. We only talked about one of them in the prepared remarks, but we have done a press release in late last year with CoSentry who’s a customer that’s already deployed with that kind of licensing model, and we’re pursuing additional opportunities and kind of working with our existing partners there to try to bring that market. It's still a small part of our business here, and we’re still kind of tweaking the business model as we move forward but, so I wouldn’t put too much emphasis on it that’s why try not to message too much on it, where really the primary growth driver here is still coming from the communication side.

Okay. And then last one from me; you talked a little bit about the change in the headcount and I’m sorry change in staff or more hiring, and I am wondering if the total headcount is up or is it mostly just back filling from attrition.

Total headcount is up. At the end of the year, we were at 386, there have been employees and got a full time equivalent, and that’s up from 362 at the end of December, and 336 a year ago.

Okay, and would you say that’s primarily sales related or can you point to a specific area where most of the hiring is coming from?

It's pretty much across the board.

Okay. All right, thank you very much.

Thanks, Jason.

Thank you. And our next question comes from the line of Mike Latimore from Northland Capital.

Hey, thanks. Excellent year.

Thanks Mike.

Thank you, Mike.

Dan, you talked a little bit about your compensation tied to both revenue growth and profits is this, the waiting between those two broad categories much different than it was last year?

It's a little more rated to revenue than it was last year.

Okay. And on subscriber acquisition cost, do you think that it will sort of stay in this $90 to $100 range is that the best way to think about it? What are you’re planning is roughly?

Over the last like few years is like the lowest was like the high 80s and the highest was like around 110, so we just said it's approximately $100 for a long, long time. And so, that’s where we think it will be in that range for the foreseeable future.

Got it. And then the, in terms of the web hosting and the consumer as a percent of total revenue was that kind of similar to what it's been in prior quarters?

Yes.

Okay. And then how about on the call center side of things, is that business sort of growing at the same pace as overall business customers or faster or slower?

It's growing pretty consistent. I mean, we sell what is just like a seamless part of what we sell in the PBX.

Yes, it's like totally bundled in and includes the telephony piece and so we sell it, I mean that’s how we’re kind of different than lot of other folks who sell contact center solutions and ours it’s like fully integrated and with the PBX.

So when somebody buy, if you get a brand new call center customer they’re also buying -- sort of a 100% of time they’re buying a PBX for their enterprise as well?

Yes, at least and I looked at the five biggest new customers we brought on board in the March quarter, Mike and all five of them bought those.

Yes, okay. And then what about any customers on the call center side that have a chance of returning, or is that sort of behind it the lager ones I guess?

I think, well referring back to the acquisition of the call center company, in terms of the transition integration issues I think a lot of that is behind us. I think one of the things pushing us into these international markets is certainly that a lot of these call centers are located in these regions, and we’re just able to better serve. We can serve them fine from where we are today, but in some of the regions you’re not able to serve them at the same quality levels, and kind of performance levels, because you got to remember in a call center we’re not just providing the voice, but we’re pushing the display that the agent is actually looking at to do the customer service. They’re doing chat and they’re logged into a customer relationship management system, and all of that data push and synchronization is occurring over the same IP networks as the voice if there is a telephone call involved. And so we just want to be able to be at the highest levels of performance just like the customer service agent was sitting here in North America regardless of where they are located in the world.

Okay, great. Thanks a lot.

All right. Thanks Mike.

Thank you. And we also have a question now from the line of Greg Burns from Sidoti & Company.

Hi, good afternoon. A follow-up on SoftBank trying to get a sense of how that big that could be it over time maybe in terms of the number of Vblock’s, SoftBank’s just kind of talking about servicing at the onset versus what the roadmap looks like and what they think they’ll be bringing online in the future, and also in terms of the virtual desktop product that you’re developing for them, is that something that you’re planning on rolling out more broadly to your wider customer base?

Yes. So Greg, this is Brian. We don’t know it’s a product and service that’s going to be launched and marketed and run by SoftBank and we’re one of their technology vendors, that’s enabling us. So, all we can do is make sure that the minimums on the deal, we’re happy with and we now we are going to get paid the minimums and we’ll be able to deliver the technology to, I mean, in terms of how big it can be, its not something I’d speculate on right now. The VDI technology that we’re building for them, we’re free to use in other applications and again it even has some interesting ties into our communications portfolio, I just talked about serving call center agent screens and so forth. And a lot of that same technology is applicable in that specific vertical of the business communication space. We certainly see opportunities to utilize it in other applications and we have the ability to sell it to other customers and will be pursuing that.

Okay. Thank you.

All right. Thanks, Greg.

Thank you. And I have no further questions in the queue at this time. I’d like to turn the conference back to Mr. Martin for concluding comments.

Okay. Thank you Karren, very much. And thank you everybody for listening today. We will be presenting at the Craig Hallum 10th Annual Institutional Investor Conference in Minneapolis on May 29th. We will be at the Stephens Spring Investment Conference in New York on June 4th and we will also be presenting at the William Blair 33rd Annual Growth conference, in Chicago on June 12. So between Dan and me we’ve – were going to have to go buy some plane tickets. It sounds like we’d hope to see you and meet up with you and be able to update you at one of these events. As I always says well, at the end of these calls, if you’re not a customer, one of our services, I really encourage you to look into using us in your business, your application. You can learn a lot about our different diversified business communication services on our website www.8x8.com. You can also call one of our sales executive at 1-866-TRY-VOIP. So with that little commercial, we’ll conclude today’s call. Go ahead Karren.

Thank you, sir. Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program and you may now disconnect. Everyone have a good day.