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Why chipmaker Broadcom is spending big bucks for aging enterprise software companies

Last year Broadcom, a chipmaker, fostered eyebrows when it acquired CA Technologies, an enterprise software company with a broad-minded portfolio of produces, including a sizable mainframe software tools business. It paid closely connected to $ 19 billion for the privilege.

Then last week, the company opened up its purse again and forked over $10.7 billion for Symantec’s enterprise security business. That’s almost $30 billion for two aging enterprise application companies. There has to be some sound strategy behind these obtains, right? Maybe.

Here’s the thing about older software corporations. They may not out-innovate the challenger anymore, but what they have going for them is a backlog of licensing revenue that appears to have value.

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About the author, Gregg Kell

Entrepreneur, Business Success Partner and Shaping The Future Podcast Host.

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