This is exactly correct. Hock (love him or hate him) knows exactly what he is doing, and is entirely unapologetic. He looks only at margin. You have $10B revenue stream at 2% profit margin? Hock will happily cut that in half for a 10% margin he can depend on. It's all about ARR. Great for shareholders and those with a mountain of RSU's... but not so great for employees. Was at CA...saw it happen.
I don't think so. Certainly, EBITDA is part of any story. What I was trying to convey was that Broadcom very much wants their customers to be engaged in a strong subscription model... big, recurring license agreements. Customers who, year after year, can be relied upon to send Broadcom money...even if they buy nothing new. Broadcom likes those Big Companies who can be counted upon to spend a consistent (but never shrinking) amount every year. Hock is ruthless in this...and has a pretty good bullshit detector... again, he probably makes a lot of people uncomfortable.
Nothing wrong with that approach... it's very pragmatic... especially for shareholders. Broadcom might give you more for your money every year, but you will never spend less of it.
