Thursday, April 30, 2009

Switch & Data

a few highlights from Switch and Data conference call (from Seeking Alpha):


Over the past three quarters, George and I have shared with you the impacts we have experienced from the prevailing economic conditions. We have communicated that some customers have been delaying decisions. We also have had customers request ramps or stage implementations for their deployments. On these calls, we also spoke about the small and medium-sized customers who are more affected by the broad economic conditions. We saw this impacting increased churn and slower growth rates from this customer segment. More recently we have been seeing some change in growth dynamics. We saw improving demand and new orders improving from small and midsized customers.

Keith Olson

And Jonathan, on the aspect of our expected growth, we continue to see very strong demand in all of the regions, all of our geographic and in our vertical market segments pipelines and frontals.

Keith Olson

Sure. We don’t see it in the large deals category. We don’t any further degradation in the sales cycle, but we are not seeing any rapid change to what was a lengthening type of decision process. The improvement I was speaking to was in the small and midsize customer that seems to be more impacted in the middle part and later stages of 2008. At the end of 2008, of course we saw a significant new logo or new customer quarter for us. We also saw in the first quarter more demand from our existing customers that seem to have compress some of their growth through the latter stages of 2008. That’s the operating environment we saw the improvements on seeing the mid to small size customer. A couple of month's worth of data doesn’t necessarily provide a lot of data points. But I thought it was worth referencing because the three quarters we spoke about that group or that customer segment being the most affected and now we are starting to see not only net new customers in two good quarters or two healthy quarters of new logos but also demand from our existing small and midsize customers starting to uptick.

Keith Olson

Okay? Let me answer your first part of the question. We saw improving new sales February over January and March over February. So it’s a trend that was kind of a stepping stone of new sales and that’s where we saw some of the uptick from the small and mid size customers as well as the characteristics that we’ve been seeing with our builds being able to attract and address larger scale opportunities, both from our existing customers as well as net new logos a number of those over the period we have communicated about their wins.

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