In fiscal 2013, our total revenue was $3.35 billion, of which $3.19 billion, or 95.2%, was attributable to the sale of customer experience systems. Revenue from managed services arrangements (for customer experience systems and advertising and media directory systems) is included in both license and service revenue. Revenue generated in connection with managed services arrangements is a significant part of our business generating substantial, long-term recurring revenue streams and cash flow. Revenue from managed services arrangements accounted for approximately $1.70 billion and $1.68 billion of revenue in fiscal 2013 and 2012, respectively. In managed services contracts revenue from the operation of a customer’s system is recognized as services are performed based on time elapsed, output produced or volume of data processed. In the initial period of our managed services projects, we often invest in modernization and consolidation of the customer’s systems. Managed services engagements can be less profitable in their early stages; however, margins tend to improve over time, more rapidly in the initial period of an engagement, as we derive benefit from the operational efficiencies and from changes in the geographical mix of our resources. Our research and development activities involve the development of new software architecture, modules and product offerings in response to an identified market demand, either as part of our internal product development programs or in conjunction with a customer project. We also expend additional amounts on applied research and software development activities to keep abreast of new technologies in the communications markets and to provide new and enhanced functionality to our existing product offerings. In fiscal 2013, we released the Amdocs CES 9 portfolio which redefines the service provider’s operating environment by delivering real-time integration across BSS, OSS and network control domains, removing Research and Development, Patents and Licenses 31 GLYPH<129> technological changes, such as the introduction of 4G wireless technology, next-generation content systems, fiber to the x (FTTx), Wi-Fi, IP Multimedia Subsystem (IMS) and LTE-based access technologies such as voice over LTE (VoLTE). GLYPH<129> Customer focus, such as: GLYPH<129> the need for service providers to focus on their customers in order to build profitable customer relationships, GLYPH<129> the need for service providers to have a unified view of the customer and deliver a personalized experience across multiple services, devices and channels, GLYPH<129> the “authority shift” toward the consumer, with increased customer expectations for new, innovative services and applications that are personally relevant and that can be accessed anytime, anywhere and from any device, GLYPH<129> the ever-increasing expectation of customer service and support, including access to self-service options that are convenient, proactive and consistent across all channels, and GLYPH<129> the need for service providers to differentiate themselves by creating a unique and mutually-valuable customer experience. GLYPH<129> The need for operational efficiency, including: GLYPH<129> the shift from in-house management to vendor solutions, GLYPH<129> business needs of service providers to reduce costs and lower total cost of ownership of software systems while retaining high-value customers in a highly competitive environment, GLYPH<129> automating and integrating business processes that span service providers’ BSS, OSS and network control and optimization platforms and create a simple, one-company face to customers, GLYPH<129> implementing and integrating new next-generation networks (and retiring legacy networks) to deploy new technologies, and GLYPH<129> transforming fragmented legacy OSS systems to introduce new services in a timely and cost-effective manner.