Autodesk, Inc. (NASDAQ:ADSK) Goldman Sachs Communacopia + Technology Conference September 11, 2024 1:10 PM ET
Company Participants
Simon Mays-Smith – VP, Investor Relations
Raji Arasu – Executive Vice President and Chief Technology Officer
Unidentified Company Representative
The exciting announcement.
Simon Mays-Smith
I have got two. So one is I have to read you a safe harbor statement, apologies for that. So we may make forward-looking statements during the course of this presentation. Please refer to our SEC filings for information and risks and other factors that may have caused our actual results to differ materially from these statements. So don’t want that. The other thing I want to say the date is just to express my condolences to the family of the 911 victims many years ago. And also to thank the first responders who responded and the people who cleared and reconstructed the sites. So just to say that.
Question-and-Answer Session
Q – Unidentified Analyst
Thank you so much. I appreciate it. Welcome to the Golden Sachs Communacopia Technology Conference 2024. Welcome to you as well, day 3. Are you holding up okay? Is everything good? Excellent. Yes. So welcome. And we’ve not heard much from Raji. Can you tell us a little bit about yourself your background, how you got to Autodesk and what’s your role at Autodesk?
Raji Arasu
Okay, it’s great to be here, my first time, so thank you for having me here. With my prior companies and at Autodesk, it is really driving some similar outcomes. So it is all about how do you really build shared capabilities that drive productivity and efficiency within the company for our employees. And the second one is really about customer innovations and sort of future business growth through modernizing with cloud technologies and that usually includes cloud and AI and services under that.
So it’s been similar across — it’s a platform transformation. And so when I got to Autodesk, it was like, wow, how can that be common share capabilities across three big industries and believe it or not, there are. And so that’s our focus. A lot of that focus is also about connected data. The data plays a huge piece here, and then building out our marketplace and ecosystem. So those are my focus areas at Autodesk.
Unidentified Analyst
Talk a little bit more about the platform, APS. I’m curious to hear what is the work that you’ve done to harmonize these three intractable applications that are very different end markets?
Raji Arasu
Absolutely, you said that very well.
Unidentified Analyst
Let me see if I still remember my Autodesk 101, manufacturing, architecture, engineering, construction, media entertainment.
Raji Arasu
Media and entertainment, you got it. And underneath that actually sometimes we don’t talk about it a bit transportation, rail and some of those are actually infrastructure underneath that. So it’s pretty big and wide. When you talk about APS, it’s essentially our Autodesk platform services. And when you look at APS, it was a key heart award in delivers. Actually I do want to build a little bit of the context on why this is important. From a customer perspective that are what they need is connected data. They want to connect their data. They want to get more intelligence out of that data. Today, there’s a lot of time that’s lost in moving files and creating error in this process. It are very expensive.
And the second thing they need is the teams are spread everywhere. They are remote teams. They’re trying to collaborate on global projects. So bringing them together is hard when you don’t have cloud connected data. And third thing is Autodesk is one of many that they use in their workflow. So Autodesk products, and then you have — I might be using a Tekla, I might be using something else, I might be using an ERP, and I want to connect that. So that’s the fundamental thing that we are trying to solve through the platform for our customers.
Now let’s take this internal. When you start to talk about Autodesk, the shared capabilities that we’re bringing is a key part of being able to accelerate some of the new plants that we have around our industry clouds in each of our industries. We are really trying to connect this into a workflow and getting away from product — end-to-end products into more a workflow. And then the second part of what I just touched upon, which is the connected data also helps us internally accelerate our AI work, which is very key, and it leaves the foundation for that — us to go faster there.
So these are the two contexts. And hence, the platform is all about that share capability, connecting data and then opening it up through this ecosystem that we have. I think that’s how it all connects together in our strategy for you.
Unidentified Analyst
We’re going to get into in a few minutes, but does this also have a role in increasing the efficiency of research and development at Autodesk?
Raji Arasu
Absolutely. I think the key thing here is all the work that we’re doing in terms of the shared capabilities, and we can touch on this later is like all of the gen AI productivity tools that we have made available to our all functions. And I know it was also covered in this conference before, but all functions in the company. And between those, there’s a ton that we can do in being able to reshape our R&D efforts towards the future and where computer is going to be a problem or where AI skills are going to be necessary. I think it really paves that way for us to do all of that sort of future investments.
Unidentified Analyst
Got it. You talked about the marketplace aspect of APS. Tell us more about it. How are you enabling with this platform, new companies that can build products in your marketplace, sell to your customers?
Raji Arasu
Yes. SP1 There is always confusion when people use the word marketplace. I do want to take a minute to say our marketplace at Autodesk is about three components. So you have cloud APIs that people use. There’s an app marketplace where you can build an application and actually sell it to our customer base. And then the third thing is we have 30,000 partners and third-party developers and all of that stuff, who’re part of this what we call ecosystem or community. So these three together make what we call is a marketplace offering.
And it’s actually a key thing because, right now, people use it in two different ways. They use it to extend or customize their workflows. So customers use it that way. And then partners build new products. So we have RFGIS Pro from our ESRI or VCAD, these are companies that are building new products on top of these APIs. But the future is going to be something different, which I think is people are going to want more of these APIs in the real-time workloads because they are moving towards automation. They’re moving towards connected workflows. And for that, some of our APIs just become part and parcel of their workloads.
So it’s going to create more stickiness, more user retention for us. I think that the key thing here is customers get to grow and scale partners get to grow their business, which is really important for us as well. That’s an ecosystem. And then the third thing for Autodesk is because of that stickiness and sort of growth and retention — it will be a huge enabler for our future from a growth perspective. Anything you want to add to,
A – Simon Mays-Smith
Yes. Just to sort of add to that to conceptually think about sort of how people integrate into salesforce conceptually is how to think about it. And for that marketplace, there’s sort of two power cords that power that marketplace. One is data and one is transactions. And so the data side Raji’s already talked about it, having granular data, so data that isn’t locked up in a file, and then you have granular data unlocking that data so that it can flow around the ecosystem, not just internally with the orchids, but within the ecosystem of our customer ecosystem and our channel power ecosystem.
And then the second one is around the transaction. So the new transaction model is a key component of that, which enables the financial transactions to flow around the ecosystem as well. So when we talk to you around older platform services, when we talk to you about the new transaction models, those are the two key power cords of the marketplace ecosystem, and that’s where the company is heading.
Unidentified Analyst
So Raji, if I reflect back on AU 2022, I think platform services was a big component of that discussion as well as the industry clouds right? So can you talk to us a little bit about how the industry clouds fit into Autodesk’s longer-term vision?
Raji Arasu
I think you probably heard all of it within this Autodesk platform. So when you talk about Autodesk platform, it’s the APS layer services, which is the platform services. And then you heard about industry clouds, which are almost like a single offering within each of our industry. So it’s very similar to the concept of marketing clouds and other stuff that you’ve seen from other companies, right? So we believe that we want to be able to get to a point where because we are filling up our portfolio, we want to get to a part where people just naturally go from one phase to the other. And not today, what they do is they have different products. You have to open up different products for design and make and operate and all of that sort of their life cycle.
It will be an integrated and interoperable sort of end-to-end offering that we can actually. That’s what the industry cloud is all about is really find everything in one place. And you’ve seen that with Fusion. We are essentially bringing in a lot of our offering within the manufacturing portfolio into one. And that’s a great sort of a little bit of a teaser into where we are going with the other industries as well, is bringing that together so it’s a natural workflow.
Unidentified Analyst
Raji, you guys Autodesk announced project Bernini in May of 2024. So can you talk to us a little bit about kind of the opportunity you see there and how this can be kind of infused across the broader portfolio?
A – Simon Mays-Smith
So I just want to put that in sort of broader context. And the way I sort of simplistically is the sort of the sexy AI stuff and then the — which everyone is focusing on, but there’s also a bunch of unsexy AI stuff, which people need to focus on more. So on the sort of sexy AI stuff and the sort of sexy and the sexy is the model, which is project Bernini that’s our multi-mobile model, which we built, we haven’t used Anthropic or OpenAI, we’ve built our own model.
And the important thing to understand about it is that we care about 3D AI, not just AI. And the reason I emphasize the 3D using a simple example is that if you type in or scan an image of a water jugs into any model, all of them will produce wonderful different jugs for you to look at. But if you rotate them and look through the top of them, a few of them will have a hole in them to hold water. That’s a problem for our customers because they’re trying to build stuff in 3D. They don’t care what the surface looks like. They care that it is in 3D and at the end of the day, a bit can stand up in the real world and the basal visit.
So drawing inference in 3D is a big deal and being able to do that. And by the way, we’ve been thinking about this problem for eight years. We didn’t suddenly have a heart stack last year. That’s why we’ve been thinking about a long time. The other thing you have to sort of think about is data intensity, which is if you’re inferring 3D, that’s potentially a lot more data, which means slow and expensive, unless you can solve the data intensity problem. So make inference using less data. Again, that’s a problem Bernini is solving as well.
There’s a bunch of other things which we talked about on our Q1 earnings call. The point is, though, that in terms of kind of the sexy and unsexy we are leading the industry by miles and none of our peers have announced a model. That’s the good news. The bad news is that for it to be adopted widely, it’s going to require our customers to fundamentally transform the way that they do business. So today, the design process is more of an additive process, literally brick by brick up from the bottom. Whereas with AI, it’s going to be more of a subtractive process where you want to put design parameters in and it will come up with 500 different versions of it, and then you subtract down to what the final version is. And that mean it’s going to take time to do, first thing; and secondly, there’s a data intensity issue because there’s going to be a lot more data points, and I’ll come back to that because that then is a good segue into the unsexy, which I want to talk about.
On the other end of the security spectrum, which we’re doing today, which is kind of automating correct, which customers don’t want to do. And so we gave you a good example of that on the Q1 earnings call. which is the drawing automation in our Fusion, which is it takes our customers today three days to produce the final 2D version of a 3D object they’ve designed, and they have to create the dimensions and the drilling instructions so that it can be manufactured. And it takes them three days — a qualified engineer three days to do, which they really don’t want to be doing because it’s incredibly [indiscernible] work and it’s error prone. And with the drawing automation, depending on the complexity of the object, we can do that in seconds or minutes, someone that takes a massive time saving. And so the way that gets monetized today is by delivering more value to the Fusion product, which we can then monetize through price. And we can do that because it’s a relatively low compute form of AI.
So going back to Bernini, problem with Bernini and with high compute AI is that if you try and put high compute AI through a subscription business model, you’re going to blow a hole in your margins. So you have to come up with other ways of charging for it. And that’s where the unsexy stuff becomes important. So first unsexy thing is the business model. So you can’t use subscription, so you have to have some form of consumption or value-based pricing. So the fact that all of our EBA customers are already on consumption pricing, we have a mass market version of that flex is already available. So we’ve already productized the consumption bit. But sitting underneath that, and this is why I emphasize this, a bunch of plumbing work we’ve been doing over the last few years and our platform to enable that work. And again, a few of our peers have begun to do that work. That takes time.
The second thing Raji has already talked about, so I’m not going to spend a lot of time is around data accessibility if you have all of the vast majority of data was locked up in files and extracting that data takes time and effort, which means you’re going to have slow and expensive products if you’re try and to scale it. So you have to blow up the files have accessible data in data lakes or come in data environment if you’re going to scale out. So that’s work again, we’ve been doing for years, and our peers will need to do as well.
And then the sort of final thing is around trust. And there’s sort of multiple dimensions of this, but what it boils down to is that our customers have a bunch of data that don’t have sufficient data to build their own models. We don’t have data, but we have the capabilities for AI and the ability to act as [Switzerland] as a partner. But we have to trust each other to do that, and trust has sort of multiple dimensions around data security, around IP protection and just the way we interact it. So it’s even though we have access to a bunch of data, it’s how we do them, how we interact with our customers is really important as well.
Raji Arasu
And I think building on what Simon said, he’s painted a great picture of both the opportunity and the challenges in getting there. From an opportunity perspective, one of the key things that Bernini going back to our Bernini topic is having this as a research experimental open out there, it’s actually going to teach us a ton that from a learning perspective that we can take back to commercial data. And also real use cases, as you pointed out, we are in the business of not just digital, but digital to physical and physical back to digital that means precision and accuracy. The minute we don’t sort of provide that as a value, it’s going to be a trust breaker. We got to build trust by providing that sort of accuracy and precision. So that’s where a lot of our time is spent is ensuring that this 3D, you talked about the hole in the middle of that wave and how do we bring that to buildings and manufacturing and parts and assemblies that’s going to be the crux of where we are spending time. And we plan to do this iteratively with the customers.
So there’s a handful of customers who’re very interested in actually participating in this journey with us. And we — if everybody is fortunate enough to have that sort of engaged customer base and a lot of the AI stuff is you want to test your way into it. And this is definitely where Bernini is going to give us learnings that we can take to smaller models that we can actually roll out to this process. But immediate focus is on the examples that Simon gave, which was around automation and conceptual augmentation in design and even timely insights, things like that, that is going to be multiplicative in terms of the productivity and efficiency we can give to our customers. They see that as value before we get to generative options for 3D. And that’s a cool stuff and the paradigm shifting stuff, but there is the turn we are doing in terms of productivity and answer.
Unidentified Analyst
I’m a mechanical engineer that I used AutoCAD before I use Windows, but I’m going to ask a financial question. I’m going to ask you a financial question. This whole transaction model, walk us through the nuts and bolts of it, how should we interpret the moving parts and the complexity, maybe break it apart and put it back together for us, if you don’t mind.
A – Simon Mays-Smith
Yes. So there’s sort of a sort of operational element to it and the financial element to it. So split them into the — and it is complex. By the way, we added quite a bit into our Q2 opening commentary to explain the moving parts in the financial bet. So, if your heads explodes and is bleeding then more of information there. So on the operational side, we have had a multiyear transition from — because we’ve been around for 40 years in the company, back in the day, we were shifting CDs around the world, physical CDs, monetizing the value of our product upfront, entirely upfront and distributing through a wholesaler and a retailer. When we went online, we kept most of the dynamics of the offline model. We were just distributing physically, but we kept monetization mostly out front with perpetual license and maintenance and we kept the wholesaler and the retailer. And then since Andrew became Chief Exec, we’ve essentially been accelerating the transition to more of a SaaS model.
So first of all, moving from monetization upfront to monetizing over the lifetime of the product, also the subscription transition. We then did the same thing to the cash flow, so moving from multiyear build up front, so monetizing upfront. It’s a multiyear build annually, monetizing over the lifetime of the contract. And then the sort of final phase is removing in most of the business in our indirect business, the wholesaler from the equation and going to a direct billing model. So the new transaction model to your question is that final bit, just in context for those of you who haven’t been paying attention, is that final bit of the equation.
And what it really is designed to enable us to do is a few things. If you sort of think revenue and unit cost of servicing that revenue. On the volume side, today, in 2/3 of our business, which is serviced by the channel, we don’t really know what’s going on with the customers. So if there’s a customer where we’re selling into two separate departments, we don’t know. If those two departments have different attach rates of our products, we don’t know. If they have a different mix of the products, we don’t know. If they have different usage rates, we don’t know. If there’s a third department which isn’t being serviced, we don’t know. We will, with the new transaction. So we can then go in and actively manage in 2/3 of our business in a way that we haven’t in terms of attach rates, in terms of usage rates, in terms of selling more products to them.
So we think, firstly, it will show up new opportunity for us to grow the business and expand our relationship with our customers, first thing. The second thing is that with the old model, we didn’t set the price to the customers. We basically sold to our resellers with a discount and then they sold it at a smaller discount to our customers. And so we didn’t really control the pricing in our end market. In the new transaction model, we will control pricing in the end markets. And so that will have some consequences, which is, if you look at our resellers, and I’m simplifying, there’s two types of resellers. You’ve got sort of value-added resellers who are taking our products and building services on top of them and doing the hard work of helping our customers undergo their digital transformations.
Let’s, for the sake of argument, call them value-added resellers. And then there are other resellers who are just taking our products and selling on actually more like a shop window. That business will become harder because their ability to flex on price will become harder. So that business will likely shift either to the value-added resellers who, if they want service or it will shift directly to us through the store for those customers who are just much more sensitive on price.
But the bottom line is it will give us more price consistency in the market and more ability to test and learn on pricing in our end markets. And then on the sort of cost side, obvious one is that we will be paying our distributors less in — across the big bit of the business. That will be — net effect of that will be less because we have to build and stand up and run our own billing platform. But it will also allow us to lower and manage the unit cost of servicing the business.
And we’ve given you two examples of that. The first one is the self-service functionality is that with the new transaction model, customers, and this may not sign like rocket science because it isn’t, but we haven’t been able to do this until now. We’ll be able to go in and purchase — do stuff themselves basically. And that means there will be fewer human touch points — that need fewer human touch points for any given transaction on average. What they will also be able to do in addition to that is they’ll be able to do what we call co-terming.
So today, because we have that fragmented reseller environment, you have lots of different contracts with customers, which means, I don’t know whether it’s every month of the year, but many times during the year, they’re going to be talking and renewing and spending time renewing contracts and that’s time for them and it’s time for us in terms of effort. And so what co-terming allows them to do is to unify all of the exploration date to the same date, so we’re only having that conversation once a year. And by the way, when we have that conversation, we’re typically having a more enterprise conversation so we can then start selling them more in. We’re only doing it once a year, so there’s less effort per dollar of transactions of doing that as well. So it’s really around allowing us to serve our — integrate more closely with the customers and serve them better and serve them with more stuff and also to reduce the unit cost of service them. And that, over time, allows also to drive sales and marketing efficiency and margin over time.
So that’s the sort of the operational side and then the financial side, and this is where your peers will start bleeding a little bit, is you have to think about sort of the gross and net effect because at the same time as this is happening, there’s an accounting change going on, so a geography change. So we paid our resellers about $600 million for those services in fiscal ’24. So it comes to ’23. And that was done — that cost is recognized pre-revenue, it’s contra revenue. So we have gross revenue, contra and then we report net revenue.
With the new transaction model because it’s what’s called an agency relationship, that $600 million is shifting into sales and marketing. Now if you just lifted and shifted it, your revenue would be $600 million higher, your cost will be $600 million higher, your dollar profit before you optimize would be the same, but your margin percent would be lower, okay? So bearing that in mind and also to understand that $600 million will shift ratably over time, it doesn’t just go big bang at one moment. You need to have two concepts separately in your head. The first one is, excluding that geography effect, what is happening to underlying margins? And you can see what’s happened to underlying margins. If you look at Slide 6 in our Q2 earnings deck, they’ve gone up by about 300 basis points over the last — on an underlying basis over the last three years.
And essentially, the work we’re doing on the new transaction model and other stuff will help us continue to drive that underlying margin higher — percentage higher on an underlying basis. But then you have to overlay over the top of that when you’re modeling it, the reported margin percent, which is that the rate of shift, which all else be equal, it’s not a drag to profit dollars, but it is a drag to the margin percentage. And I know it’s complicated. It makes my ears bleed and I am sure it makes your lead. But just to make sure everyone sort of has an idea of all the moving parts.
Unidentified Analyst
How side point shift in the market?
A – Simon Mays-Smith
Yes. It’s $600 million. So it’s a meaningful number shifting from — and that provides a tailwind to revenue growth — well, a tailwind to cost growth or headwind, depending on which way you’re optimist or pessimist. But before you optimize it doesn’t affect profit dollars. But then as you optimize, you start getting the benefit on the profit dollars.
Unidentified Analyst
And how do you go about the process of optimizing that? Because there so much more you’re going to learn in that expense number that you can be more efficient with, maybe the channel partner, the way of doing business has been a 40-year thing to point. So how do you uncover efficiency?
A – Simon Mays-Smith
So we’ll give you more details on that over time. But just to sort of give you some understanding of the process, which is, we built — this is not something that sort of magically appeared in November, which is when we really start first — actually, we were talking about it before. But the — this is something that’s been in the processes because we’ve been building the billing platform for the last three years and testing it. And then we launched Flex on top of it about 1.5 years ago. We then went live in Australia, which is when we started talking to the market more fully about it. And then we had the U.S. launch in June, and then we’ve got the Europe launch next week in about a week’s time. And then Japan, which is the last big one in November.
Unidentified Analyst
Did you build this platform?
Raji Arasu
I mean that’s the back end is all multiyear work that we have gone through. So it’s actually pretty significant. The gravity of what Simon is talking about here is, I don’t know if people actually understood like the multidimensional change your partners going through from becoming resellers to ours that’s changing their world. Customers buying in a different way. And then you have us from Autodesk’s perspective, actually taking up training wheels off and directly interacting with customers who are being sort of partners have taken care of it. So there’s a multidimensional transformation here. And I think the key thing was, this was in the works so the financial systems had to deliver some of the back end — I mean it’s a massive effort.
Unidentified Analyst
I don’t know how you guys decide. Why did you do this?
Raji Arasu
But I think that is the point that I think Simon is making is, it is essential for that future growth for us to actually have that interaction with the customer, our partners to become more wires versus resellers and customers to be able to interact with us. I think it is essential for that. So it’s sort of a necessity that we had to go rebuild is. I think that is a key part of this.
Unidentified Analyst
That’s my tough question for the end would you do this self-inflicting?
A – Simon Mays-Smith
Just to sort of sort of finish that thought is that the — and to your question, your provision and I’ll answer that one, which is that this is a complicated process. And — but at the core of it, what we’re doing is we’re transferring the ownership of the relationship from our channel partners directly to us. That is the most important thing that’s happening. And we’re very focused on that happening and not messing it up.
Unidentified Analyst
What could be the risks that are cognizant that your cognizant of that?
A – Simon Mays-Smith
Well, so to manage those risks, we need to keep our channel partners focused on that process. We need to keep our employees focused on the process. And then that affects how we communicate the process as well. And so this is a long preamble to say to your question, which is I’m not going to precisely answer your question because — so we were communicating to you as part of managing that process, and it is complicated. So — but the point is that we’ve been building the billing platform. We have an implementation process, which we are in the process of doing. And then we’ve said as an optimization phase. And the same way that we have very clear and detailed plans on the build process, we have very clear and detailed plans on the implementation process, and we have very clear and detailed plans on the optimization process as well. And we are sequencing those and implementing them in a structured way so that we don’t mess everything up or try not to mess up.
Raji Arasu
Maybe one more addition to add to Simon is do we have a choice because of the fact that customers are going to want to buy in a new way. And this is actually an important aspect of not just growing our customer base actually future customers. And they may not be the big accounts, but for — as we go down and look at mid-tier, they don’t want self-serve. They’re going to want to be able to directly interact with a company and buy. And it is a necessity, we need to go through this process and with all its sort of challenges to be able to get there.
Unidentified Analyst
We have time for one or two more questions. Simon, I want to touch on IIJA funding and kind of where we are in kind of that allocation process. How many of these projects are shovel ready? How levered is Autodesk’s AEC business to this?
A – Simon Mays-Smith
The way to think about the IIJA is, it’s a cherry on a very large cake is that there are billions and billions of dollars spent on infrastructure every year. And the IIJA adds a bit extra a cherry on that very large cap. So it’s interesting, but it’s not game-changing in terms of the overall market. But that’s not to say that it’s not important, but the bit that’s important is not the bit that everyone focusing on a bit. It’s important in IIJA is the $100 million that is being spent to incentivize the federal and state departments of transportation to digitize their workflows, connect them into cloud. And as part of doing that, they’re also adopting them. So, whenever — sorry, building information modeling for the room are paying attention.
So whenever somebody says, connected workflows in the cloud and building information modeling, the person at the front of that — the company at the front of the team will be Autodesk. And so what it’s doing is it is opening up the cake as an opportunity to us. So rather than just cherry now because it’s government will take a decade or more to happen, but the cake is very, very big. It’s probably one of the biggest untapped or underpenetrated opportunities for Autodesk globally in the construction is the U.S. infrastructure market. There’s an incumbent in that market. And what we’re slowly doing is they adopt digital workflows is being able to crack into that market. So if you look at sort of Pennsylvania Department of Transportation is a good recent example of that.
Historically, they have single sourced on a competitor operations. And what they did in their most recent is they now dual sourced and specifically for their next-generation data platform on Autodesk Construction Cloud. And what will happen over time is that the proportion of the business within Autodesk Construction Cloud will grow. And so you’re going to see that, we hope and expect over time happening in other departments of transportation slowly over time, and that will give us access to more and more of that very large infrastructure cake. So yes, focus on the cake, not the cherry.
Unidentified Analyst
And Raji to bring you back in — I will as the final question. On Autodesk Construction Cloud, you guys have taken kind of a buy versus build approach. I mean I imagine that you’ve been very involved on the back end integrating these products. So how complete kind of the Construction Cloud platform today, any product gaps you need to fill?
Raji Arasu
Yes, go ahead. Simon.
A – Simon Mays-Smith
We basically — if you think about construction, precon and construction and then within construction, you’ve got the key workloads or project management, site management and cost management, all of those are in the integrated build products. So we basically made a bunch of acquisitions and then integrated them when the process of doing the same thing with our preconstruction offering. And then do you want to add?
Raji Arasu
Yes, I think a lot of the work that we’re doing is not just integrating but actually figuring out what is the next suite of products. So we’re going through that process. So not just about pulling it all together. So ACC is our sort of leading one in that build portfolio. The second thing is just actually making it a lot of what you talked about the opportunities and the cherry and the cake is about data regionalization, FedRAMP moderate that we just got authorized for. These are the key elements that are required for the cloud products. So that’s what we are building in the — into that platform. So that you can expand beyond what it is doing today.
Unidentified Analyst
On that note, thank you so much for participating in this conference. I hope you have a productive set of meetings and wish you good fortune with your new journey.
A – Simon Mays-Smith
Thank you so much.
Unidentified Analyst
Thanks so much.
Raji Arasu
Thank you.
Unidentified Analyst
Let’s give them a round of applause, please.
A – Simon Mays-Smith
Thank you.
