Last year Broadcom, a chipmaker, raised eyebrows when it acquired CA Technologies, an enterprise software company with a broad portfolio of products, including a sizable mainframe software tools business. It paid close to $ 19 billion for the privilege.
Then last week, the company opened up its wallet again and forked over $ 10.7 billion for Symantec’s enterprise security business. That’s almost $ 30 billion for two aging enterprise software companies. There has to be some sound strategy behind these purchases, right? Maybe.
Here’s the thing about older software companies. They may not out-innovate the competition anymore, but what they have going for them is a backlog of licensing revenue that appears to have value.