David J. Henshall
President and Chief Executive Officer at Citrix Systems
Sure, Raimo. Actually two different issues. In Q1, just to remind everybody, we had a lot of very special business continuity type licences, very short-term in nature, things we put together back in the early stage of the pandemic that had impacted overall duration. These were really just unique ability to try and serve customers. Duration is not a factor in Q2. Duration has come back to normal levels as we anticipated, no change. You tend to see a slightly longer duration in SaaS contracts and areas like that, but certainly along our lines of expectation.
I think if you step back and think about Q2, let me put it in context for just a minute. There's three main focus areas around go-to-market. And the first is accurately forecasting the totals and the mix of different license types. Obviously, they have a different impact financially. Second is migrating the installed base to Cloud. And the third is driving net new business bookings.
With mix, we've consistently come in much higher with the SaaS mix, both in Q2 and in our forward guidance. Installed base migration, as you see in the letter, has been really positive. We've really stepped up the pace over the last nine months or so; more than 2 times where we were this time a year ago. Customers are seeing a lot of value in this migration and our co-sell with the hyperscalers and particularly like Microsoft, for example, is up sharply.
However, new business bookings was really the challenge in Q2 and I think we believe that the root cause of that is a combination of really three things: primarily the complexity that has existed with trying to balance all of these different moving parts; the mix messaging and priorities inside the field that, that has caused, whether it's duration, as you mentioned, migrations, new products, etc. I think it's confusing and it's just frankly inefficient. We are behind where I'd like to be in overall quota-carrying capacity just due to investments in other areas of go-to market, as well as the pace of our hiring process; and the third is, we just haven't done enough, in my opinion, to really enable our traditional channel partners to participate in the SaaS transition of the company. I think they're focused too much on fulfillment and an inconsistent alignment with the field.
So that's why we listed those four things that we're doing to really focus on reorganizing and prioritizing the sales team, increasing direct quota-carriers, channel leverage and prioritizing SaaS, and happy to go into more detail about any of those four.