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Companies have finite attention. Taking on the risk of switching tools often has a higher cost than paying more for the existing tools. There is a significant opportunity cost offsetting the savings. Trying to compete on price with a tool a company already uses is usually an exercise in futility.

A core function of enterprise sales is figuring out where that opportunity cost threshold is. PE often targets industries that are currently (in their estimation) priced well below that threshold.

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Medium / large companies won't take the risk on smaller operations selling a new focused tool unless it's a major pain point. They'll pay more for less risk, assuming the PE-managed company will go out of their way with account management to address all their concerns.

AVGO/Broadcom in some way acts like a big PE firm, rolling up other software companies, integrating them into their huge suite of offerings, ousting the new integrated offering's competing tools from the customers environments and selling the increment, and cutting off smaller customers not willing to subscribe to the huge suite.

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Their competitors did exactly that!

Moved right in with the same old price so I didn't even have to expand the budget and they threw in training for free!

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Because capitalism and customer brand awareness don’t work like your Econ class told you. There is a lot more nuance, starting with the inertia of customer’s awareness of brand reputation. But don’t listen to my ramblings, this comment in this thread does a better job than I would:

https://news.ycombinator.com/item?id=48295440

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sure. not just that. certainly part of the issue is that the market is not perfect information.

but there are plenty of other reasons as well.

starting a new venture, whether from the foundation of an existing company or doing a new one takes investment and carries risk. maybe the sales relationships the existing company had were the results of decades of investment. maybe the ownership or the employees had a specific skillset or maybe they used tooling that could be bought easily anymore. maybe they had an important and established relationship with suppliers.

maybe PE moved in because the business was viable, but not really growing and there isn't sufficient upside to motivate investors.

or the business only existed because the owner just loved that thing so much and funded it at a near-loss out of family money.

or the business was based on a huge capital investment or ownership of property in a key location that happened 20 years ago and isn't possible to replicate because of changes in the environment.

there are 1000 reasons why these things aren't spherical cows.

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