[mamonster]

I think in this particular case you are probably right(you see much more experienced in actual enterprise sales), but I think my more general point is that these sorts of price hikes are what is priced into this business now.

VMware was bought at about 400k rev/employee, Broadcom was running at about 1.7mio per prior to that. Tan is essentially running a PE buyout shop that is listed, and he uses a lot of leverage. He might not get it to 1.5 mio but he wouldn't have bought it if he thought it could churn out anything less than like 1.2(over 6-7 years).

[alephnerd]

> these sorts of price hikes are what is priced into this business now

Pretty much.

> Tan is essentially running a PE buyout shop that is listed

I'd disagree on that. A PE play would severely underpay engineering and look for a short (2-3 year) turnaround by re-IPOing. Meanwhile, Broadcom tries to hold portfolio companies and pay AWS level salaries to hires.

Instead, Broadcom is using the same strategy that PANW and ZS are mimicking to own the F100 market.

There is severe vendor fatigue in the market, as various different apps are viewed as a massive cost inefficency and there is a very real chance of different apps becoming an attack vector (eg. Slack at Uber).

The only solution for this is vendor consolidation, as this

1. Limits the amount of RFPs you need to vet significantly

2. Narrow down any spending inefficiencies

3. Limits your attack vectors with a vendor breach or compliance overheads

This is why Niklesh Arora announced "Platformization" at PANW's earnings call a couple days ago, and is the same strategy Broadcom has been using for almost a decade, and what ZS+CRWD have started using as well.

This is a demand from F1000s now as well as institutional investors, and a massive reason why Broadcom's stock has gone from $40 to $1300 in a decade.