And when you look at sort of the licensing stuff coming out of the SAP itself, is the work that you are doing is there a lag or can you help us kind of figure out the correlation between the work that you are doing and the licensing information that we are getting out of them. Are you working on work that was, a project that was started 10 to 12 months ago? Is that a fair assumption to make?
Ram Mynampati
Let me answer the question in an indirect way. First of all we maintain for a long time that there is no direct correlation between the growth in our package implementation business versus licensing and we believe that to be the case, but to the extent that there is a correlation that is the work that we get from customers is directly attributed to a new license of an SAP or a Oracle product, typically there is a lag time of 2 quarters or so when we see getting involved in implementation of those applications, but I would not say the entire package implementation business is correlated to licensing. So there is a portion of the business that is somewhat related, but in those instances where it is related you can probably assume couple of quarters of lag time
Joseph Foresi – Janney Montgomery Scott
And then just one last question, actually in two parts. I wonder first if you could talk about what you are seeing on the pricing environment. And then secondly it seems like you reduced your headcount guidance much more than you reduced your revenue. Typically we have seen a link between the headcount and revenue guidance. How should we think about that relationship at this point?
Ram Mynampati
On the pricing front, again there are two flavors to pricing. One is, all the deals that we have signed, all the contracts that we have renegotiated this year, they have been in many instances for higher prices while there are instances where one odd request came for reduced pricing. Overall the sentiment to date is, of a stable pricing sort of realized prices for the year is concerned. So our outlook on pricing for the year continues to be stable realized prices for FY2009. Having said that, we do see the possibility that there will be some pressure on prices if the current economic environment prevails for few months longer, but so far in our interactions that have not resulted in, us concluding that there is a pressure on pricing for this year. And I’ll let Srinivas answer the question on manpower.
V Srinivas
Yeah. We have basically, as you would have observed our guidance implies 21% upper end of guidance implies Q3 and Q4 organically seeing flattish growth revenues will be at Q2 levels. So since we are not you building in much of a growth going forward so we thought that it is prudent to bring down hiring also and with soft job market environment like this it would be easy for us to switch gears should need arise then quickly bring them on board. So to address these issues and also to basically to protect our margins so we thought that it would be better that we go slow on gross additions. So that is the reason why we kind of took this call of reducing the overall of hiring to 8000.
Joseph Foresi – Janney Montgomery Scott
And so basically it is safe to say pricing is stable and hiring coming in and utilization is the factor that you are pushing to, is that correct.
V. Srinivas
No sorry I did not get that.
Joseph Foresi – Janney Montgomery Scott
If hiring is decreasing and pricing is flat then it is safe to say that utilizations is the metric that you are really going to focus on going forward.
V. Srinivas
Yeah absolutely, that is definitely one of the important focus areas, but even with this gross addition which we are planning we expect the utilizations to come under pressure because of the lower volume growth that we are projecting. So but then definitely it is one of the areas of focus and we would like to keep this as high as possible.
Joseph Foresi – Janney Montgomery Scott
Thank you.
Operator |
