And if I could sneak in one more for Dan, you’ve talked for the last couple of quarters about strong channel momentum. What inning are you guys in that journey? And where can that kind of go from here? Thank you.
Barry Zwarenstein: I’ll go first then.
Mike Burkland: Yeah.
Barry Zwarenstein: So I’m going to try and be creative over here Billy in terms of coming up with a different answer. You gave me some avenues though, which are going to go down. International is clearly [Indiscernible] becoming increasingly important. It goes up one percentage point as a percent of total revenue each year. The growth has slowed actually in Europe as well this last quarter down to I think it was 28%, because they too are facing macro headwinds. But we are operating in a very fertile field there. And that superior growth rate will almost certainly — will extremely likely to continue in 2024. The channel, I’m going to target — and ask either Mike or Dan to answer, because they get really passionate when it comes to that — and channel is more important on the International side.
And then — but just generally, the drum that we’ve been beating is the two halves of the growth are installed base and the new logos. On the new logos, you’re looking at three very serene people. In terms of the RFPs are there we can execute against the — manage that. We don’t worry about the demand. It’s getting the continued high win rates. On the installed base, we’ve lapped it. There’s, no particular verticals that we should be worried about at all, but having said that, if you had asked this question 10 months ago we wouldn’t have guessed anything about Silicon Valley Bank. So you need to — we need to be prudent at the start of the year.
Mike Burkland: And can I just layer on a couple of things. The optimism around 2024 quite frankly is built mainly on our backlog. It’s all the bookings momentum that we’ve had over the last few quarters that have yet to turn to revenue. As well as again that flow of demand that we’re seeing inflect. And this is — this RFP number that I talked about 66% growth year-over-year and 21% sequentially. You can see that accelerating and we can see it accelerate we can feel it. And again, those are enterprise and strategic RFPs. A lot of these enterprise deals will be shorter sales cycles and potential revenue impact in 2024. But the good news is as Barry said with DBRR assumptions that are very reasonable. You can kind of do the math in terms of what 16% revenue looks like from a dollar perspective what that contributes next year.
If DBRR is relatively stable which we believe it will be you can see it doesn’t take a whole lot of turn-ups from our backlog to drive 16% revenue growth. So we’re very comfortable with that. And then if I could start on the channel Dan you can chime in terms of what inning we’re in I would say we’re in about the second or third inning in terms of our channel maturity. This is very similar to what you saw I would say two, three years ago in terms of just larger enterprises adopting cloud. The channel has been kind of holding on to legacy and on-premise until a few years ago when they started to lean in with us and again being named number one by the top three technology distributors that’s a huge accomplishment by our channel team. We’ve got the best in the business.
Jake Butterball and his team have absolutely crushed it. So we’re kind of punching above our weight in some respects, but I do believe we’re still in the second or third inning.
Dan Burkland: And just to add to that on the channel front, if you look at the large announcements that we’ve made with big partners IBM this quarter, TELUS International, BT. We’re just getting started with them. And they own and really help manage digital transformation projects for the largest companies in the world. And they have now made that pivot to Mike’s point over to, oh, we’ve got to go in and lead with CCaaS and lead with cloud solutions. And lead with AI and automation. And so we’re in the process of educating training and certifying those folks to come up to speed and they will be a force multiplier for us in a tremendous way. And if I give you one statistic just a short time ago if you look at 2019, we had 19 partners that brought to us — you asked about the pipeline and how much of that top of funnel comes from the partners.
We have 19 partners that brought us over $1 million of ACV annual contract value deals in that year 2019. This year we’ve had 63 such partners bring us over $1 million in ACV. And that number is only continuing to grow. And so as Mike said, we’re in the second or third inning. I would argue that from a revenue influence and lead opportunity, we could be even in the first inning especially at the high end of the market because that really hasn’t been available to us until just recently. And we like the position we’re in. If you read the Baird’s survey that they did and look at where we sit when we do sign up a partner, how they feel about us compared to our competitors in this market we were rated number one in many almost every category of who’s going to win this market, who’s doing best in AI, who’s the easiest to work with.
We really pride ourselves and Jake and his team are doing an amazing job of enabling the partners educating them and making sure that we operate with integrity in this space because they want to turn to somebody they know they can trust to deliver what they’re promising to their clients.
Barry Zwarenstein: So, Billy, in summary that’s how we feel about the 16%.
Unidentified Analyst : Well, thank you very much. Appreciate it.
Barry Zwarenstein: Thank you.
Operator: Moving on to Peter Levine with Evercore.
Peter Levine: Great. Thanks guys. Maybe to add to that last question. I know you opened up the channel I think to do more pro services to start offloading that I think earlier this year. So maybe just walk us through kind of where that evolution is today? And then second one is to Barry is I know there’s a — you talked about scaling up the 70% gross margins. Can you maybe help us frame the trajectory of when we get there? Is it more of the partners? Is it ARPU? Just help us understand trajectory to that 70% gross margin target. Thanks.
