Good day, ladies and gentlemen, and welcome to the 3PAR second quarter fiscal 2009 earnings conference call. My name is Katie and I’ll be your coordinator for today. (Operator instructions) I would now like to turn the call over to the company. Please proceed.

Good evening and welcome to 3PAR’s fiscal year 2009 second quarter earnings release conference call. This conference call will include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. These forward-looking statements include among others, statements about our financial projections and growth trends for the third quarter and full year of fiscal 2009 and beyond, as well as financial projections and growth trends for the overall storage market and segments thereof. Anticipated impact and effectiveness of our market business and investment strategies, anticipated market share opportunities and diversification of our customer base, anticipated demand for our storage solution and reception of our value proposition as well as adoption trends in our customer markets. All of these forward-looking statements involve known and unknown risks and uncertainties and important factors that may cause our actual results, levels of activity, performance or achievement or those in our industry to differ from those expressed or implied by the statements we make. In evaluating these forward-looking statements you should specifically consider various risk factors including the risk factors detailed from time to time in our filings with the Securities and Exchange Commission, including but not limited to those set forth in our quarterly report on Form 10-Q for the quarter ended June 30, 2008. Additional risk factors and other information you should consider will also be set forth in our quarterly report on Form 10-Q for the quarter ended September 30, 2008 which will be filed with the SEC in November. These factors may cause our results to differ materially from the forward-looking statements we make on this conference call. We cannot guarantee future results, levels of activity, performance, or achievements. Our future results will depend on numerous factors including among other the impact of macroeconomic trends on information technology spending, market acceptance of our utility storage solutions, and competitive practices in our industry. These forward-looking statements are made only as of today’s date and we expressly disclaim any obligation to update or revise the information contained in them. Please also note that this conference call will provide listeners with certain financial metrics determined on a non-GAAP basis both for a comparison to previous quarters and the previous fiscal year and for our outlook for the current quarter. These financial metrics, together with a reconciliation to comparable GAAP financial measures, are contained in today’s financial results press release, which we have posted on our website at investor relations, on www.3par.com under press releases and have furnished to the SEC on Form 8-K. We encourage listeners to review these items. With that, I’d now like to turn the call over to David Scott, CEO of 3PAR. David?

Good afternoon and thank you for joining us for our second quarter fiscal year 2009 earnings call. We’re pleased to report revenue of $45.1 million, 61% higher than our revenue in this period a year ago, and 5% higher than the previous quarter. The 5% sequential increase was particularly impressive given that we had accelerated a significant amount of revenue into our first fiscal quarter from the rest of the year including the quarter which we are reporting today. This top line result exceeded our guidance and we believe this trend demonstrates continued strength in our customer markets and demand for our products. In fiscal Q2 we achieved a gross margin of 65.2%. I’m pleased that we continue to be able to maintain these gross margins levels. It’s an important measure of our customer’s view of the value that we deliver to their organizations. We delivered net income of $520,000 on a non-GAAP basis excluding stock-based compensation expenses. This result translated into a non-GAAP EPS of $0.01. We achieved this in spite of substantial headwinds in the other income line including negative currency effects and substantial reductions in net interest income. Our GAAP EPS including expenses related to stock options was negative $0.02 a share. I’d like to talk about a few other achievements in the quarter in the areas of our new platform rollout, continued innovation and the build-out of our business both domestically and internationally. We announced our new T-class InServ storage server in September which we’ve been successfully shipping since the beginning of that quarter. This new platform reinforced our leadership position as the fastest storage array in the industry as independently audited by the Storage Performance Council under its SPC-1 benchmark. The T-class delivers approximately two to three times the performance of the S-class platform that…

Good afternoon and let me add my welcome to David’s. Thanks for joining us. As David mentioned, we are very pleased to report revenue of $45.1 million for the quarter ended September 30, an increase of 61% over the same quarter a year ago and a 5% increase over the $43 million we recorded in the previous quarter. Of this total, product revenue accounted for $41.4 million or 92% of total revenue, an increase of 55% over our product revenue recognized in the same quarter a year ago, and a 4% increase from product revenue recognized in the previous quarter. Support revenue totaled $3.7 million, 8% of total revenue and an increase of 208% over support revenue recognized in the same quarter a year ago and a 23% increase from the previous quarter. In terms of the split between new and repeat business, 79% of total revenue in this quarter came from customers who had purchased from us previously as compared to 88% in the previous quarter. As David mentioned previously, we believe the 21% of revenue representing new business reflects 3PAR’s continued market penetration. Excluding revenue attributable to software contract renewals, our repeat revenue for this quarter was 71% as compared to 81% in the previous quarter. This quarter no single customer accounted for more than 10% of total revenue. Although our customer concentration will fluctuate quarter-over-quarter as a result of factors such as when we receive orders and when we install systems, we expect to continue expanding our customer base which will further reduce customer concentration over time. Turning to the geographic view, we generated 16% of revenue from customers outside the US compared to 8% in the previous quarter. As we said before, we expect that our international sales will contribute in the mid-teens percentage of our…

Thanks, Adriel. Almost one year after our idea of and despite unprecedented economic turbulence, I’m delighted that we’ve consistently met or exceeded our guidance over the last four quarters. We remain vigilant for signs that the economy will substantially change the trajectory of our business performance but have not seen any substantial impact so far. Though prudently cautious, we are also cognizant of our opportunities. We have a strong balance sheet with no debt. Customer trends towards the deployment of utility and cloud computing infrastructures may significantly favor our ongoing business performance. And with a solution that allows customers to achieve more with less, we believe that current economic conditions could present a unique opportunity for 3PAR to aggressively take market share. With that, let me turn it over to the operator to call for questions. Thank you.

(Operator instructions) Your first question comes from the line of Tom Curlin from RBC. Please proceed. Tom Curlin – RBC: Hey, good afternoon and congratulations on another very good revenue quarter.

Thanks a lot. Tom Curlin – RBC: Are you seeing a meaningful change in competitive behavior out there in this environment, or, a fairly stable in that sense despite the macro stuff?

We’ve seen some very aggressive pricing action from EMC and IBM over the last couple of months. But mainly restricted to those two companies otherwise I wouldn’t say we’ve seen any substantial change. Tom Curlin – RBC: And how about HP in terms of the high-end stuff they resell?

I haven’t seen anything that I would know from HP. Tom Curlin – RBC: Okay and you mentioned the financial stuff holding up for you guys. You tend to have some larger deals so is that driven by one or two customers or is that fairly broad-based in terms of the contribution in the quarter and the pipeline and how it’s holding up for you?

It was actually fairly broad-based within the financial services industry. There was no really large, kind of, customer deals that we would call out of the norm. Tom Curlin – RBC: All right and then no 10% customers in the quarter from a pipeline perspective and the December quarter outlook, can you tell us if that includes a 10% plus type of assumption for any customer in the December quarter?

I can’t give you the granularity of whether that includes a 10% plus type of customer. I can tell you that our pipeline looks extremely healthy. Tom Curlin – RBC: And then just finally from me, in the internet segment, are there any pockets of that that you find to be more cautious than others? For example, let’s say internet customers that are focused very heavily on consumer or different types of consumer apps?

It’s difficult for us to discern that because the internet segment, the business to consumer service providers as we talk about internet web 2.0 is one of the most volatile segments from a quarter-to-quarter perspective both on revenue and a booking level. So it’s always challenging for us to determine simply from a quarter-to-quarter whether there’s any meaningful change. So I really can’t comment on that right now. Tom Curlin – RBC: Okay, all right. Thanks very much.

Thanks, Tom.

Your next question comes from the line of Brent Bracelin from Pacific Crest. Please proceed. Brent Bracelin – Pacific Crest: Thank you. A couple questions here from me. I guess one, how much revenue is driven from the new platform in the quarter? And then kind of how fast do you think you’ll ramp as far as percent of the business over the next quarter or two? Two, salesforce.com, obviously big win there, have you started installing yet? Did you start to recognize revenue this quarter? Or does it come in next quarter? And then lastly, you did see a pretty healthy up-tick in revenue from new customers. Any verticals there that are stand-out where you’re having more success than any other verticals?

I wish you’d asked them one at a time, Brent. As far as the T-class, we were shipping the T-class from the beginning of the quarter that we’re reporting. We don’t breakdown our product line portfolio in general but I can tell you that we were very happy with the rate of uptake of the T-class and we continue to expect that trend to continue. I’m unaware, we tend not to talk about individual customers who have contributed to the revenue line right now. I think we’d have to go offline and find out whether salesforce.com did indeed increase, but I think as far as new customers overall we had a very good quarter and it was very broad-based among all verticals including financial services. Brent Bracelin – Pacific Crest: Okay. Again, the new customer, would you attribute that success there to stronger sales force? Would you attribute it to kind of the new product starting to accelerate some share gains? How should we kind of think about that up-tick in what has historically been a slightly more difficult quarter across the industry?

I think we have been reporting consistently that we’ve been delighted by our new customer win rate. We do have the impact that there can be fluctuations and when revenue from those new customers is recognized. But I believe the rate of uptake is more clearly associated with evidence back from these customers that they have to do more with less. Improved utilization efficiency through technologies like thin provisioning, virtual copy snapshot technologies, our Fast RAID 5 implementations are becoming a very important element in customers’ ability to handle growing data growth rates in a very controlled IT budgetary environment. Brent Bracelin – Pacific Crest: Okay, thank you. That’s helpful and then my last question really is around hiring. I know that early in the year you talked about it being a little bit more challenging environment from a sales hiring standpoint. Has that burden eased up a little bit? Or is it still challenging? And how should we kind of generally think about new sales hire given the momentum you continue to see there?

I think sales hiring remains a challenge and I can’t foresee an environment where it won’t but in terms of additions to our sales force I think we’re making steady progress and I don’t think we yet see a signal of an environment where we cannot achieve the growth targets that we’ve projected. Brent Bracelin – Pacific Crest: Okay, great. Thank you.

Your next question comes from the line Aaron Rakers from Wachovia. Aaron Rakers – Wachovia: Thanks, guys and congratulations as well. A couple questions from me. I guess first building on Tom’s question earlier on the competitive front, just – can you help us understand to what extent maybe you’ve seen the XIV platform in the market from IBM because I think that competitively that has a somewhat similar architecture as what you guys offer?

We’ve seen extremely little of it. There have been a couple of our customers mainly in financial services who’ve been kind of looking at evaluation units in their R&D organization but we haven’t seen any of that move to kind of purchases for a production basis. So at the moment our experience base on actually meeting them in the field is extremely limited. Aaron Rakers – Wachovia: Okay and then obviously you had a pretty solid new customer number this quarter but your existing customer revenue looks like it was down 5% or 6% sequentially. Was there something in that with relation to the product cycle or anything to take away from that in terms of just being down sequentially this last quarter?

Not really. I think what you should remember is that last quarter we reported that we had to accelerate $2.2 million worth of ratable revenue part of which would have come in this quarter as well as I think we reported one of our large internet companies accelerated revenue that was planned for this quarter so they’re part of our existing customer base. So I think that had a substantial distortion effect on what you see in this quarter from a repeat business perspective. Aaron Rakers – Wachovia: Perfect and a couple other questions, can you talk about your guidance going forward and what you are assuming with regard to the additions to productive account executives? And are you being a little bit more cautious with regard to the current environment and productivity or bookings from those account executives going forward?

I’d say that the sort of widening of the guidance that we had from a revenue standpoint was only associated with the general macroeconomic conditions. We’re trying to be as prudent as we can and Aaron, you’ve known how prudent we’ve been in the past and we’re just trying to sort of take that into account. As it relates to the productive account executive growth, in general we fit into the path of a tough hiring environment but we still believe that we should be able to still continue to grow the productive AEs to the point where we can still achieve our operating target model by the end of fiscal year ‘11. So far, given all that we see right now, we see sort of the long-term aspects of reaching our model still okay, but we’re just trying to be a little bit more prudent given the macroeconomic environment. Aaron Rakers – Wachovia: Fair enough and then final question for me, can you help us understand how much of your existing customer base, or your installed base, our currently license your thin provisioning capability?

Again, we don’t tend to break down the percentages but what I can tell you directionally is that the level of thin provisioning licensing, has gone up substantially from a trend perspective over the last year. Aaron Rakers – Wachovia: Fair enough. Thanks, guys.

, : Aron Honig – Canaccord Adams: Hi, guys. Nice quarter.

Thanks to you. Aron Honig – Canaccord Adams: Can you talk a little bit about the service provider vertical? Was that stronger than expected in the quarter?

It was strong and it was also at the – towards the higher end of the 30% to 40% range that we’ve talked about in the past. Aron Honig – Canaccord Adams: Okay and then as budgets sort of come in, I think you guys said on the last quarter call that 3PAR’s usually between 5% to 10% of a normal IT budget. Has that gone up as your product has become stronger in the market?

I think we made the point in the past that that figure depends very heavily on which segment we’re talking about. The figure of 5% to 10% has really been in the global 500 customer base because in other segments, for instance the business to business service provider or the business to consumer web and internet 2.0 environments, we often may be the standard platform throughout the organization and our growth rates there are associated with the growth rates of those businesses. But in the global 500 type environment clearly, once we’re installed and have a footprint, we have this massive opportunity to grow market share within each of those enterprises. Aron Honig – Canaccord Adams: Okay, thanks.

Your next question comes from the line of Doug Whitman from Whitman Capital. Please proceed. Doug Whitman – Whitman Capital: Congratulations on the strong quarter, guys. Had a quick question about the foreign exchange. I missed the number that you said that you had a foreign currency exchange loss.

Yes, the actual amount was around $425,000. Doug Whitman – Whitman Capital: And also the R&D spending, you spent very aggressively for your future growth but was there any additional large mass kit expenses in the quarter, any one-time items?

There are some in there but basically, it’s with respect to obviously ongoing and new products and that will occur from time to time. Doug Whitman – Whitman Capital: And you talked about gaining market share and talk a little bit about in particular where you’re thinking you’re gaining share both as far as from companies and also is there particular verticals where you’re seeing any opportunities that you hadn’t seen before?

Well, I think now the quarter’s been reported out and I’ve seen reporting that suggests E&P storage business year-over-year was growing about 11%, Hitachi storage solutions was growing around 12% and I think in US currencies and IBM year-over-year about 1%. So those are our high-end competitors and our growth rate as we’ve just reported was about 62%. So you have effectively, a four, five times the growth rate that we’re demonstrating, admittedly off of a much lower number but that clearly allows us to consistently take market share. I believe it’s pretty broad based but our strength in the business to business service provider segment is clearly one where we keep adding new business to business service provider, managed hosters, people involved in software as a service, et cetera and we feel very good about our momentum there. We believe that cloud computing and the purveyors of cloud computing based enterprise services are going to become the dominant form of deploying enterprise IT over the next 10 to 15 years and securing our position there is very important to us.

Dave? Doug Whitman – Whitman Capital: Congratulations again. In the new T-class, do you have any different kind of characteristics in terms of its sales cycle? The type of customers you’re trying to take? Can you just talk about, and I know you’re doing a road show on that one too, how customers, their thoughts that they’ve said to you on it so far on the road show?

Yes, I can tell you that the sale cycles are very similar to the S-class. There is probably absolutely no change. The platform is consistent, it’s part of the same architecture it’s just a new generation with a new, our new Gen3 ASIC. We have road shows that are going on. I think there have been three in Europe. I think six in the US They’ve been extremely well-attended, a mixture of our customers as well as prospects and they’re a powerful tool for building our future pipeline activity. Doug Whitman – Whitman Capital: Thank you, guys.

Thank you.

Your next question comes from the line of Mark Boulter [ph] from Bluefin; please proceed. Mark Boulter – Bluefin: Thanks, David, Adriel. Dave, it looks to me like the S-class has been mostly banished from your website. I’m curious in terms of inter-operatability, if there really is any and the pricing differences between T and S classes?

Sure. The S-class has certainly not been banished. We continue to sell it. There are many of our customers who continue to be purchasing S-class associated with their own kind of change management strategies and consistency of infrastructure and we expect to be selling that platform on into next year. As far as the second part of your question, could you just repeat it again, I’m sorry. Mark Boulter – Bluefin: Just curious in terms of the pricing and interoperability of the – if you’re populating a cabinet, do you have to populate with S-class components and drives and chassis and controllers?

Thank you for reminding me. The T-class is priced at a slightly higher incremental level than the S-class, probably around a 5% to 10% difference. As far as interoperability, we have a very strong message in that space. First of all, our management consoles and GUIs can manage both S and T classes as well as in fact our L, O, and E class systems from a single unit. So they could be mixed and matched. There’s complete interoperability between the S, T and E classes as far as our remote replication technology is concerned so people can have different systems located in remote data centers and provide disaster recovery solutions between them. Also all of the software that runs both on the S and the T classes kind of identical versions so there are no core differences. And then finally we provide data in place upgrades so that existing customers with S-classes that want to upgrade to the T-class can do so without having to disrupt their data or migrate it from one system to another. Mark Boulter – Bluefin: Great, thank you. My other question, did you mention cash flow or if you used any of the buyback?

We hadn’t mentioned that.

We hadn’t mentioned it. We actually did not use any of the $10 million amount of the board-authorized buyback program last quarter. As you may recall after the call the stock price sort of rose significantly and during that period of time we did not purchase at that time and when the stock price did come down a bit that was already during our close window. Now that we’re obviously through coming up on another open window, we’ll certainly reconsider it and sort of see where we are once obviously we’ve come back after a couple of days of the earnings being out there.

But we’re also cognizant of the major changes that occurred in that period of time in the general economic conditions and so we’ll use careful management judgment as to how we pursue this. Mark Boulter – Bluefin: I think I teased you about not being able to buy it at $8 a share last quarter so my face is red and cash from operations? Did you mention?

Cash from operations, actually on a net cash basis we generated about $600,000 but on a cash on operations we had about $3.9 million in operating cash flow. Mark Boulter – Bluefin: Great, thank you.

Thanks.

Your next question comes from the line of Alex Kurtz from Merriman Curhan Ford. Please proceed. Alex Kurtz – Merriman Curhan Ford: Congratulations on another good quarter.

Hey, thanks, Alex. Alex Kurtz – Merriman Curhan Ford: So just looking at your guidance and thinking that you have a fiscal year-end that ends in March and I think a lot of the concern out there in the market is a lot of the storage companies are going to do well in December or moderately well because that’s budget year flushes for IT budgets but you’re going to see a drop-off in March. That’s your fiscal year-end; you probably have some accelerators for sales reps. How should we think about that offset to your fiscal year-end?

I think the assessment of our guidance range and the winding of our guidance range is really associated with the fact that we haven’t seen significant impact to our business trajectory right up until this earnings call. As you can imagine I do very detailed – I’ve had very detailed discussions with my field organization, I speak with our customers et cetera and try to assess whether there’s any information that gives me a sense that their demand for storage is dropping and may impact our business model. I can tell you that from our field’s perspective we feel the pipeline is strengthening but given that current position we’re also cognizant that things can change very rapidly. And if they do change, as you can imagine, it’s prudent for us to do, we wanted to make sure that our guidance reflected that outside possibility of the change and we will fundamentally restructure our business to address it if it happens. But we’ll hit – we’ll cross that bridge when it comes to it. Alex Kurtz – Merriman Curhan Ford: But you feel that with March being your fiscal year-end that’s probably your strongest quarter of the year that should more than offset what may be a decline in overall IT budgets as it goes into 2009.

The problem with your question, Alex, is that those who are knowledgeable commentators point out the fact that everything can drop off a cliff almost instantaneously so we as the management team are positioned where we can’t forecast accurately if such a change could happen. We do believe that we have favorable elements like the acceleration that occurs as our sales forces goes into commissions and accelerators and has incentive to continue to push forward but the other half of it is do customers have a budget to buy? Alex Kurtz – Merriman Curhan Ford: Right. Okay, thank you and then back on the financial segment, I know you haven’t disclosed really in detail in the past but can you give us a broad range of what the financial services represented as a percent of sales?

We’ve said in the past that financial services is one of our top three segments and it was a strong performance across the board. Alex Kurtz – Merriman Curhan Ford: And Dave, did you see strength this quarter in the investment banking world or is it in commercial banks and other?

We’re very broad based in financial services but I would clearly tell you that we also saw strength in the investment banking world. Alex Kurtz – Merriman Curhan Ford: Thanks and then Adriel, just to go through the OpEx question again, it may have been asked, was there one specific line item either R&D or sales and marketing that saw greater than usual growth this quarter and that maybe should decline going into December?

No, there wasn’t one particular here and there. I mean the one-timers I sort of mentioned which was the bad debt reserve that we took sort of precautionary tone there and obviously the stock-based compensation expenses that sort of rose a bit there. But there wasn’t anything specifically that made it rise other than those items. Alex Kurtz – Merriman Curhan Ford: So just to – looking at it from a modeling perspective, that 64% to 66% range is sort of how to get to the number?

Yes, I did say on the call that we thought we’d be more on the higher end of that range. Alex Kurtz – Merriman Curhan Ford: And that’s a non-GAAP range, right, Adriel?

No that’s actually a GAAP range. Alex Kurtz – Merriman Curhan Ford: GAAP range, okay, thank you very much.

Your next question comes from the line of Rajesh Ghai from ThinkPanmure, please proceed. Rajesh Ghai – ThinkPanmure: Hello there, congratulations on the quarter.

Thanks, Rajesh. Rajesh Ghai – ThinkPanmure: If I’m correct, then I believe you had a lot more transactions this quarter and the average revenue for transaction was down. Can you see a trend over there? Or is that something that was just one-off?

Rajesh, I think the advantage of our architecture is becoming clear. In an environment where maybe IT budgets are facing some constraints, our clustered architecture and its very granular approach allows people to buy just in time and that kind of encourages more transactions that may be of a relatively smaller size as they buy when they absolutely need it. And that’s very different from some of our competitors approaches where – someone mentioned XIV earlier. I think you have to buy 180 terabytes of storage at once every time you want to buy more capacity and that doesn’t sound like a good approach in this kind of economic climate. Rajesh Ghai – ThinkPanmure: Okay and Adriel, you mentioned that you’ve taken – you’ve kind of taken a higher back-end reserve. Are you seeing any impact with the credit crunch out there that makes you do that? Or is that just precautionary?

Nothing broad based, we’ve had an instance here or there of where there has been some push out or some concern, but I think again, it’s been just sort of us looking at our back-end reserve, looking at our accounts receivable and obviously keeping in mind the general macro economic climate, and just being prudent. Rajesh Ghai – ThinkPanmure: Okay, and the T Class, was that more popular with your existing customer base? Or do you see some new customers who haven’t bought the technology in past decide to jump in because of the T Class?

We saw very strong adoption amongst new customers as well with the T Class. Rajesh Ghai – ThinkPanmure: Okay, and in terms of close rates, you mentioned that your funnel was much bigger at this point in time in the quarter. Are you seeing those close rates decline or close rates as high as what you saw last quarter?

I don’t think there’s been any significant change in our close rates that I can point to. Rajesh Ghai – ThinkPanmure: Okay, and have you seen any traction from the Cloud storage vendors in terms of new business or is that –?

We would view ourselves as the leading Cloud storage vendor. Can you outline who you would –? Rajesh Ghai – ThinkPanmure: The likes of Paracale or Nirvanix or Vembu, the pure play guys –.

I’m afraid we’ve never seen them. Rajesh Ghai – ThinkPanmure: Okay. Well thank you, I’ll talk later.

Thanks very much.

Your next question comes from the line of Clay Sumner from FBR, please proceed. Clay Sumner – FBR: Thanks and congratulations guys on a strong quarter.

Thanks, Clay. Clay Sumner – FBR: Especially on the new customer acquisition, the revenue kick back level that you talked about. Was that traceable to large deals or numbers or large number of customers?

It was a large number of customers. I think in past quarters, and Clay, I think we had a discussion about this. We remain delighted by our new customer win rate. Our numbers on new business can fluctuate just because of when companies decide to accept product when they have power Cloud floor space available, et cetera and so there’s some natural fluctuations there which will make that line item change with some level of volatility. But you know it’s broad based. We’re adding customers at a rate that I’m very happy with right now. Clay Sumner – FBR: Okay thanks and can you talk about maybe what you’re seeing or hearing from your service provider customer segment in terms of – in this macro economic environment, are they seeing a shift towards more outsourcing? Or are they seeing maybe customers flow some of their outsourcing initiatives.

You know it’s strange. Because when you talk about outsourcers, you have to be very careful to distinguish their different lines of business. In some cases they have both co-location, they have dedicated managed hosting as well as kind of utility infrastructure kind of hosting. What I’d say is that the Utility Infrastructure Hosting business, for almost all of them seems to be growing at a very strong pace. I think it’s a better economic model for customers when their IT budgets are constrained and that leads them to be more successful. Some of the other lines of business, it’s more difficult. Kind of dedicated managed hosting, I suspect would get – we’re hearing feedback that there’s longer cycle times involved with that business and I’m not sure that we’re close enough to the Co-lo business to comment on it. Clay Sumner – FBR: Okay, and then, Adriel, in terms of inventory, it seemed to rise a little bit. Was that related to the T series product?

Yes, that was the S to T transition. Clay Sumner – FBR: Okay, and then lastly for me, David, I guess you mentioned earlier customers buying more just in time with your product. Can you talk about industry wide, your products or others? Are you seeing customers start to shift toward paying for shorter term maintenance contracts? Maybe paying a year at a time instead of three, even if they have to pay up for that?

You know I have to say I haven’t seen that trend at all. Competitively, it’s been pushing the other way. There’ve been a number of companies pushing fourth year, fifth year maintenance bumbled into up front deals and I haven’t seen signs of those trends. You know fifth year is very, very rare, but I haven’t seen people move the other direction towards just requesting one year. Clay Sumner – FBR: Right, thank you very much.

Thanks, Clay.

The next question comes from the line of (inaudible). I’m sorry, please proceed.

How are you doing, David? In the last few weeks, a number of Wickibond users have reported to us that their leasing and financing strategies are changing and may be getting more complicated. And basically what they’ve said is that money is a less fungible commodity in this market. So the way they find money and value money has changed in the last several weeks. Who has it to lend? And what are the terms? And the treasurers are putting more constraints on them. One even said GE Capital wouldn’t lease to them. So I know you guys have a deal with Key Equipment. I have two questions, is leasing a major component of your deal flow? And two, is there any change with the relationship with Key Equipment and are you seeing anything on this front?

So leasing hasn’t been a huge component of our deals and our revenue and in terms of our relationship with Key, we’ve been in relationship with Key for a while and I think the general conflict is that where they’re going to grow with us over time. Part of it is that many times the customers are so focused on the actual technology aspect of it that typically when they make the decision to go with 3PAR, they often just hand it on to their own finance areas and then they lease it on the back end for themselves. So there may be some leasing on the back end that we just don’t see, but at least from the front end deal aspect, I find it a huge component of our revenue today.

Okay, thanks.

At this time, I’m showing you have no further questions. I’d like to now turn the call back over to management for closing remarks.

All right, well, thank you again. We’re delighted with our quarter’s performance and look forward to speaking with many of you over the course of the next few weeks.

Thanks very much.

Ladies and gentlemen, thank you for your participation in today’s conference call, you may now disconnect. Have a wonderful day.