Supplier Report: 3/7/2015





  • To follow up from last week – HP is spending $2.7B on Aruba networking
  • Is the Aruba buy a good move?

    Make no mistake about it. Hewlett-Packard definitely needs to do this because its consumer business lines are slowing down. While its corporate lines show a lot of promise, they still need a lot of growth. This move to buy Aruba Networks makes a lot of sense within this broader context.

  • Warren Buffet made alot of news this week, and I find this comment interesting in the context of HP:

    According to Buffett, bankers’ appetites for deals mean that they can do almost anything to push for the sale or purchase of a company. He cited how investment bankers usually urge buyers to pay premiums of up to 50% for the target company. Investment bankers usually tell buyers wonderful things that will happen once the deal closes, such as “control value” of the acquisition. The interest of the bankers is to push a deal through and get paid for their action.

    However, Buffett said the same bankers would turn up a few years later and urge for the spinoff of the business they had pushed so hard to be acquired. Instead of control value, bankers change the story and urge for spinoff of the acquisition on the basis of unlocking shareholder value.


  • Salesforce needs to watch its back for Microsoft spent a lot of time on its investor call talking about the large enterprise deals it is winning because that’s what the Street likes to hear, but the company has to keep its eyes on the midmarket, where Microsoft Dynamics is right behind them. The midmarket is an engine of growth and a great counterbalance to the inherent spikes of big deals. And Microsoft is getting good at winning here. Not only is its Cloud version competitively priced for the midmarket, it also has a strong reseller channel that can sell cost-effectively into this market.

  • The end of SaaS

    The best development platforms we’ve seen are Apple’s iOS and Google’s Android for mobile, or the Xbox One. All of these development platforms have hardware, an operating system, and a software layer. Salesforce’s development platform only leverages software and provides less utility to 3rd party app developers, hence only ~300 apps created in the past 15 months. The most comparable example would be Facebook’s single sign-on capabilities. By integrating with Facebook, an app developer can let a new user create a user profile by “Logging in with Facebook.” This is the best use case we’ve seen of development platforms that only leverage software. But I don’t see it translating too well with a CRM tool instead of social network.

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