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To: Peter Church who wrote (3255)	5/29/1998 9:24:00 PM
From: peter grossman	Respond to of 10309

I should have been clearer. What I meant by "seats, support, and service" was all revenue currently reported that is not from royalties. The income statements break this out as product and service, without indicating what portion of product revenue is derived from royalties.

To: Peter Church who wrote (3255)	5/29/1998 10:47:00 PM
From: Michael Greene	Respond to of 10309

I am confused about something here. Are customer service and support going to add to margins or are they just a necessary cost of doing business? It seems that they may be the least profitable slice of WIND's business model. Peter, Service adds to revenue and earnings but reduces margins. The breakout that Ron Abelmann has given us in the past is that (in rough terms) the overall gross margin of 80% is composed of 90% gross margin on all license revenues and 60% gross margin on all services (engineering, support, training, etc.). I do not think that we have been given any finer breakdown than this. Michael