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by Rastonbury
850 days ago
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I work in enterprise saas as well and I can't imagine how bad this customer must be that they can break pricing unless VMware runs really low margins vs the industry. There must be other things as well 8m is 0.6% of their revenue, and they grew in revenue 4% from 2022 to 2023[1]. Losing 0.5% kinda hurts when they are growing that slowly. That 8m can't be that easily magicked out of existing customers or the freed up resources supporting that customer they fired. I know nothing about their business or financials however [1]https://finance.yahoo.com/news/vmware-reports-fourth-quarter... |
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My hunch is an Account Team gave a heavily discounted deal to land an upper market customer in order to meet quarterly commitments or get a nice commission.
The customer ended up accepting the $100M price-point as well (https://twitter.com/cioontherun/status/1761882689886433742), so they were clearly mis-tiered. If you can afford (what I assume is) a multi-year contract with a 9 figure TCV, you are generating 9 or 10 figures in revenue.
I've heard of similar shenanigans down the grapevine at w/ Cisco and Dell EMC and absolutely wouldn't be surprised if a similar thing happened at VMWare.