Michel Feaster: evaluation

Transcript context

…To preview tech themes a little bit, I mean this is something that for listeners that aren’t as familiar with enterprise technology, it is just a hard thing initially to get your mind around. Steve Jobs talked about this that in the enterprise, it’s not always the best product that wins. Opsware was the market leader but as you’re saying, they didn’t have the best product. They had the best sales motion. Yeah, and at least in server automation. So their strategy was to basically move to the suite motion. So they had the best suite. BladeLogic did not have other products. They had partnerships to solve that problem. So if Opsware could move the buying criteria to being data center automation, they won, because it isn’t just head-to-head product to product. So our assessment was, number one, we wanted to buy the market leader and that having the first mover in our channel, best current position in what we thought was one of the best channels in the world is the best combination. But the second piece of math for us was that if we had gone after BladeLogic, we would have had to do three additional acquisitions and we felt that the risk, even though if it would have been cheaper, we thought that actually the likelihood of our ability to successful acquire four companies was significantly less than one. If you look at big companies buying small companies, in many cases the medium-sized ones do the best. They’re big enough that they can be put in a channel and it works. In many cases these little technology tuck-ins, a $10 million acquisition is harder to make work than a billion-dollar acquisition because there’s not a critical mass of people and ideas to teach the rest of the company how to sell. Oh wow.…

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