4 ms·

Broadcom's handling of the VMWare acquisition gives me a renewed perspective and surprising appreciation of Oracle.

ebiester 2y ago
Both of them are lawnmowers. They are looking to extract the maximum amount of money possible. I'd argue that Broadcom could extract more money with smaller uplifts but I think they are also looking to consolidate their customer base. Some of these crazy numbers may be doing just that - saying that these people aren't wanted as customers anymore.
- hotstickyballs 2y ago
  Extracting the maximum amount of money possible is the primary purpose of a company. It’s what you should expect to happen.
  - lenerdenator 2y ago
    I mean, sure it is, if you have a severe case of sociopathy.
    - redundantly 2y ago
      That's capitalism for ya.
      - lenerdenator 2y ago
        I'd say we're dipping more towards a return to feudalism.
  - unyttigfjelltol 2y ago
    They're just monetizing goodwill until it's zero.
  - 1propionyl 2y ago
    > Extracting the maximum amount of money possible is the primary purpose of a company. Is it really though?
    - p_l 2y ago
      It's really not, but certain economist pushed such idea a lot to the point people think it's a law (and pushed it in business ethics context to make it funnier)
    - wongarsu 2y ago
      Not really. For public companies the primary goal is creating the highest possible stock price, or in rarer cases high dividends. Extracting as much money as possible is a common strategy for achieving that but it's not the only one. And arguably the strategy is used way more than it should be. Boards tend to set up bad incentives for the company leadership. For private companies the goal is whatever the owner wants. That can be profit, but often it's about legacy. Or something entirely different. As far as we know SpaceX's purpose is indeed to create a self-sustaining mars colony
  - ebiester 2y ago
    Maximizing the long term value of the company can be at odds with extracting the most amount of money over the next quarter. For example, Meta could say "if you don't pay us 100 dollars per year, we will delete your entire account including all of your memories and photos across instagram, threads, and Facebook" and probably make a giant amount of money in the next quarter as people panic over losing their memories to something they considered reliable. However, it would kill the company's long term growth.
  - outworlder 2y ago
    > Extracting the maximum amount of money possible is the primary purpose of a company. It’s what you should expect to happen. Except that's not what they are doing. By all accounts (and their financial guys may disagree with me and that's ok), what they are actually doing is trying to extract more money than what the market will bear. They may succeed for a while, but it comes at the cost of cannibalizing your own business.
    - griomnib 2y ago
      Who knows, maybe they are thinking we’ll buy VMWare for $x, use the implicit lock in to extort customers until there’s nothing left in three years, get a tax write off, and pocket $3x.
    - this_user 2y ago
      They certainly are losing customers, but that also reduces costs on their side, which means lower overall revenue, but higher margins. Maybe they are trying to get rid of anyone who isn't so locked in that they cannot leave, consolidate everything around the biggest and most profitable accounts. Once you know how large that group is, you can squeeze them even further.
  - throw0101d 2y ago
    > Extracting the maximum amount of money possible is the primary purpose of a company. [citation needed] More subtle consideration: over what period of time? A quarter? Year? Decade? Other? The leadership at Boeing tried to maximize numbers for a while, and where are they now? Jack Welch who is/was all about monetary results: > Regarding shareholder value, Welch said in a Financial Times interview on the global financial crisis of 2008–2009, "On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy...your main constituencies are your employees, your customers and your products."[69] * https://en.wikipedia.org/wiki/Jack_Welch#Politics https://en.wikipedia.org/wiki/Jack_Welch#Politics
- throw0101d 2y ago
  > Both of them are lawnmowers. For those that do not know the reference, "Fork Yeah! The Rise and Development of illumos" by Bryan Cantrill at LISA11: * https://www.youtube.com/watch?v=-zRN7XLCRhc&t=38m24s https://www.youtube.com/watch?v=-zRN7XLCRhc&t=38m24s And the lead up is entertaining too: * https://www.youtube.com/watch?v=-zRN7XLCRhc&t=34m7s https://www.youtube.com/watch?v=-zRN7XLCRhc&t=34m7s
lenerdenator 2y ago
Don't normalize either.

Both of them are lawnmowers. They are looking to extract the maximum amount of money possible. I'd argue that Broadcom could extract more money with smaller uplifts but I think they are also looking to consolidate their customer base. Some of these crazy numbers may be doing just that - saying that these people aren't wanted as customers anymore.

hotstickyballs 2y ago
Extracting the maximum amount of money possible is the primary purpose of a company. It’s what you should expect to happen.
- lenerdenator 2y ago
  I mean, sure it is, if you have a severe case of sociopathy.
  - redundantly 2y ago
    That's capitalism for ya.
    - lenerdenator 2y ago
      I'd say we're dipping more towards a return to feudalism.
- unyttigfjelltol 2y ago
  They're just monetizing goodwill until it's zero.
- 1propionyl 2y ago
  > Extracting the maximum amount of money possible is the primary purpose of a company. Is it really though?
  - p_l 2y ago
    It's really not, but certain economist pushed such idea a lot to the point people think it's a law (and pushed it in business ethics context to make it funnier)
  - wongarsu 2y ago
    Not really. For public companies the primary goal is creating the highest possible stock price, or in rarer cases high dividends. Extracting as much money as possible is a common strategy for achieving that but it's not the only one. And arguably the strategy is used way more than it should be. Boards tend to set up bad incentives for the company leadership. For private companies the goal is whatever the owner wants. That can be profit, but often it's about legacy. Or something entirely different. As far as we know SpaceX's purpose is indeed to create a self-sustaining mars colony
- ebiester 2y ago
  Maximizing the long term value of the company can be at odds with extracting the most amount of money over the next quarter. For example, Meta could say "if you don't pay us 100 dollars per year, we will delete your entire account including all of your memories and photos across instagram, threads, and Facebook" and probably make a giant amount of money in the next quarter as people panic over losing their memories to something they considered reliable. However, it would kill the company's long term growth.
- outworlder 2y ago
  > Extracting the maximum amount of money possible is the primary purpose of a company. It’s what you should expect to happen. Except that's not what they are doing. By all accounts (and their financial guys may disagree with me and that's ok), what they are actually doing is trying to extract more money than what the market will bear. They may succeed for a while, but it comes at the cost of cannibalizing your own business.
  - griomnib 2y ago
    Who knows, maybe they are thinking we’ll buy VMWare for $x, use the implicit lock in to extort customers until there’s nothing left in three years, get a tax write off, and pocket $3x.
  - this_user 2y ago
    They certainly are losing customers, but that also reduces costs on their side, which means lower overall revenue, but higher margins. Maybe they are trying to get rid of anyone who isn't so locked in that they cannot leave, consolidate everything around the biggest and most profitable accounts. Once you know how large that group is, you can squeeze them even further.
- throw0101d 2y ago
  > Extracting the maximum amount of money possible is the primary purpose of a company. [citation needed] More subtle consideration: over what period of time? A quarter? Year? Decade? Other? The leadership at Boeing tried to maximize numbers for a while, and where are they now? Jack Welch who is/was all about monetary results: > Regarding shareholder value, Welch said in a Financial Times interview on the global financial crisis of 2008–2009, "On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy...your main constituencies are your employees, your customers and your products."[69] * https://en.wikipedia.org/wiki/Jack_Welch#Politics https://en.wikipedia.org/wiki/Jack_Welch#Politics
throw0101d 2y ago
> Both of them are lawnmowers. For those that do not know the reference, "Fork Yeah! The Rise and Development of illumos" by Bryan Cantrill at LISA11: * https://www.youtube.com/watch?v=-zRN7XLCRhc&t=38m24s https://www.youtube.com/watch?v=-zRN7XLCRhc&t=38m24s And the lead up is entertaining too: * https://www.youtube.com/watch?v=-zRN7XLCRhc&t=34m7s https://www.youtube.com/watch?v=-zRN7XLCRhc&t=34m7s

lenerdenator 2y ago

Don't normalize either.