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VMWare has 400k customers and 13.4b revenue according to google, which means their average customer is around 335k.
by itsdrewmiller 3y ago
VMWare has 400k customers and 13.4b revenue according to google, which means their average customer is around 335k.
- alephnerd 3y agoThat's not how the average should be calculated. It should be: (Contract_1_yearly+...+Contract_n_yearly)/num_contracts Anyhow the customer signed the deal (https://twitter.com/cioontherun/status/1761882689886433742 https://twitter.com/cioontherun/status/1761882689886433742), implying they were underpaying and had the capacity to pay the true rate.
- itsdrewmiller 3y agoThat’s going to get you basically the same number unless you think most of those 400k customers do not have contracts for some reason? My revenue-based approach would undercount in-year bookings but your approach would undercount NRR which I suspect is nontrivial for VMWare (but I haven’t checked). Also just to be clear I agree with your initial comment - there are lots of reasons even big customers can be worth repricing based on their true costs and strategic relevance. And at less than 0.1% of revenue VMWare can certainly afford to risk it.
- alephnerd 3y agoAfter having some caffeine percolate in my veins, I see your point and agree!
- alephnerd 3y agoedit: I'm wrong on the calculation portion - don't do napkin math without coffee itsdrewmiller is right
- Sebb767 3y ago> Anyhow the customer signed the deal (https://twitter.com/cioontherun/status/1761882689886433742 https://twitter.com/cioontherun/status/1761882689886433742), implying they were underpaying and had the capacity to pay the true rate. If they are sufficiently locked in, this might have been the best option to migrate away without major disruption.