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This is an extremely common private equity playbook, that hasn’t seen as wide adoption in software as it has in other industries because there is a presumption
by kasey_junk 3y ago
This is an extremely common private equity playbook, that hasn’t seen as wide adoption in software as it has in other industries because there is a presumption that software clients aren’t particularly sticky and the software space allows faster innovation. Twitter is a story that confirms that bias (so far).
I think Unity is the next big test case. If users leave the platform in droves and revenue tanks it will continue to confirm the current hypotheses. That said private equity firms will keep trying it no matter what as the market biases make it an easier space to compete so I’m not sure it matters much to software companies.
- michaelt 3y agoEh, software can be pretty sticky if your users have lots of files in your proprietary format nobody else can read. A company that uses Photoshop, or Altium, or SolidWorks, isn't going to move off it easily. Hell, existing users will often initially be thankful when product managers stop moving the buttons every 6 months. Of course you'll stop attracting new customers as your product gets surpassed - but there could be a lot of $$$$ to be extracted before revenue drops to zero.
- yndoendo 3y agoI would argue that much of Microsoft is built around legacy applications and code that prevents moving to alternative solutions. A lot of companies do not want to spend the time and money to pivot, not have the labor to do so. The true tech debt is a hidden cost where change is a visible cost.
- red-iron-pine 3y agoOracle and MSSQL enterprise owned my last org. SAP offered to migrate us -- on to their new HANA platform. Guess how much that would cost? So we still have these ancient Oracle boxes and newish MSSQL kicking around. They should be entering high school before too long...