alt Hacker NewsIn this case, why doesn't someone else see a market opportunity and sell competing tools for less?
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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.
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!
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:
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.