Which product line or business unit may attract Hock Tan to stay invested other than Mainframe?
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CA holds over 1500 patents and you would be surprised at what some of them cover. But again it doesn't really matter what they are. This is a foot in the door for Broadcom. The more US companies they acquire the harder it will be for the DOJ to deny future acquisitions based on them being a "national security risk".
Patents....CA...? ROTFL... IP model in SW industry only scales in a joint development model. Been there. Done that. How many patents does CA have...? How deep is our R&D..?
Opioid moment.
Think "patents."
It almost doesn't matter what Broadcom acquires. Look for them to start buying US companies that have a lot of patents outside the semiconductor industry. It's a strategic move.
@SantaC Hock will be seen as a Dotard two years from now. He doesn’t understand the software business...
Why would anyone with half a brain get in the Enterprise infrastructure software business? It’s all moving to the cloud...
What US IP? There is no synergy with Broadcom and CA. Unless he wants to become a deal guy and just do deals...I don’t think so..maybe he should buy JC Penney, or some industrial controls company.
The investment bankers lathered and pumped him up with this deal. But he don’t know software and it will implode in 2-3 years....
For products with longer-term maintenance contracts that Broadcom keeps, it is likely that (1) they will be placed in maintenance mode and (2) all support moved offshore, including any development. A bare minimum of staff will be used to support them.
For other products, they will find willing buyers. I am sure that their M&A team has already identified candidates and are talking with PE firms and strategic asset buyers.
I don't agree this is purely a cash flow play. Broadcom wants to buy up US IP. They're trying to get more of a foothold in the US after being smacked down on the Qualcomm acquisition for not being american enough.
@UB0PZhR-3wkr CA had products in the past that although leading the Market were killed without taking into account BUs, customers or contracts.
I agree but it can take years to shut products all the way down. There are multi year contracts to consider, etc. It's not going to be a bloodbath as much as it's going to be a bleed out.
These last two posts are 100% on point. Distributed sales pipeline has fallen off a cliff since the deal was announced.
Anything new or hot = divest
Anything generating 50%+ margins = milk
Anything else = liquidate
Good luck getting a 15% margin business to 50%. No way anyone is buying new product right now from CA until things shake out. By the time AVGO takes over many borderline products will already fall behind.
My guess are that some products are more valuable to sell off as opposed to squeeze for revenue, while some get squeezed for revenue and others get shut down. if the product is already at 15-20% profit, they can squeeze it with layoffs to get to a higher margin. Veracode probably has more value as a sell off. If they can spin off 5-6 billion is assets and increase net profit by 500 million through layoffs, it picture becomes more compelling.
What about recent acquisitions? He May want to keep automatic and veracode around as those are still somewhat hot in the market. But as a customer there are so many choices so maybe those go also. Who knows. Everyone should gear up for the worst and explore their options
You’re delusional. This is a CASH FLOW play....what’s generating profit.....
Sorry, I meant to say "I'm not going to mention specifics".
I'm going to mention specifics, for I do take my confidentiality agreement seriously, but there are BUs other than MF that Broadcom does desire. Pure profit is not the only thing they're looking for. There were certain words used by Broadcom that should give you a hint as to which products they will focus on.
Layoffs. The man deals in layoffs.
What other product line produces a profit margin > 50%? None.