In the M&A world, you kiss a lot of frogs

I like this post on what filling up the deal-flow pipeline for VCs looks like. For example, a good bozo bit heuristic:

One of the reasons that a meeting doesn’t go well is that the founding team will say they expect $50 million in revenue in 5 years, but they have difficulty articulating how they’ll get to their first $1million.

Having worked on the buy side of the table (when I was in corporate strategy, working on M&A for software and cloud at Dell), there’s a similar story for what the exit looks like.

When you’re on the buyer side of the table, you see an equally large number of pitches, but also from investment bankers (i-bankers) with their fancy banker books. They try to reverse engineer what your strategy is (briefly: what your motivations, hopes and dreams are [hopefully revenue!]…your criteria for buying companies) and present a good analysis and story for companies you should buy.

Companies themselves visit you a lot and pitch everything from partnerships, to investing in them, to the allusion of being bought. It’s sort of funny, very rarely does a company ever come to you and say: you should buy me!

Just as with VCs, because of the high volume of incoming meeting requests, you develop a set of criteria for bozo bitting companies, fair or not.

The whole process is an annoying poker like process where each side is trying to bluff about how much it’s bluffing. In theory, the numbers your shown are good and genuine - but that all mostly relies on trust based on relationships and body language, early one, before lawyers and fine print gets involved.

Anyhow, one day I hope to write-up more deeply what it’s like being on the buy side of the table: that really doesn’t get addressed enough. There’s lots, and lots of bonkers stories and principals to extract.

Red Hat jumps on all the right cloud bandwagons, focusing on new application trends (451 Report)

Red Hat Summit Keynote

My overview of the Red Hat Summit is up now, for clients only of course. Here’s the 451 Take:

Like many infrastructure companies, Red Hat used its recent annual summit to point out the importance of developers as the driver for the next wave of IT spending: namely, developers writing new software on top of cloud platforms, often using devops-like practices. We, of course, think paying attention to this space is wise as companies seek to become digital enterprises, using custom applications and cloud-based IT to instrument and boost their business processes. It’s tempting to suggest a headline like “we’re working on it” to sum up many of the announcements at Red Hat Summit. However, because it runs its product management primarily in an open source fashion, Red Hat announcements are often about starting projects (with calls for community participation), not just the final, fully productized 1.0 version of the product when it’s released.

Read the full report at 451, ore apply for a trial if you’re not already a client.

I thought it was a good show with some nice announcements. As the title suggests, I think Red Hat is picking up on the right trends (that is, new technologies and practices that to incorporate into their product suite that will help their customers).

As I noted (well, quoted from another story) in my post on the Summit last week, Red Hat gets about 80% of it’s $1.3bn in revenue from RHEL subscriptions. Over the coming years, the company will need to diversify even more, of course. Like SUSE, they’re looking towards enterprise storage (they bought Gluster, for example) which is a whole new business unit with, possibly, significant revenue, for both companies.

F. Scott Fitzgerald once said, “Yeah, this should definitely be in 3D.”

No, what he said was, “[T]he test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.” That’s what you have to do: you have to be confident in your potential, and aware of your inexperience. And that’s really tough. There are moments when you’ll have a different point of view because you’re a fresh set of eyes; because you don’t care how it’s been done before; because you’re sharp and creative; because there is another way, a better way. But there will also be moments when you have a different point of view because you’re wrong, because you’re 23 and you should shut up and listen to somebody who’s been around the block.

Life Lessons in Fighting the Culture of Bullshit, Jon Lovett

It’s a good speech, no matter how old you are, for how to cope with working with other people which, we know, is hell.

Red Hat revenues, old vs. new and early cloud momemtum

Red Hat Summit Keynote

Brandon Butler sums up the “old” (Linux) vs “new” (middleware and cloud) revenue stream for Red Hat

The company gets about 80% of its $1.3 billion in revenues from a category that’s headlined by RHEL, and those subscriptions aren’t likely going away any time soon, says Joel Fishbein, who tracks Red Hat’s stock closely as an analyst at BMO Capital Markets.

The enterprise transition from Unix to Linux is fairly mature, with revenue from the RHEL-focused main part of the business growing 13% last year, Fishbein says. The company’s other, newer products grew at a much faster 38% growth rate, but they’re a much smaller portion of the business.

Indeed, CFO Charlie Peters went over those and other financial numbers indepth yesterday during the Red Hat Summit analyst day.

I have an overview report in the hopper that’ll likely be up next week, but here’s a few highlights in this vein:

  • The OpenStack market is very new, at least as Red Hat is seeing it. As Butler’s piece notes, sales people get comp’ed not on deal size, but transitioning to production.

  • Red Hat said it had “several dozens” of PoCs, with a handful of named customers running on production.

  • The company had just closed it’s first $1m+ OpenStack deal.

  • Even more early is the company’s PaaS offering, OpenShift in those deals, as CEO Jim Whitehurst said, “you’re literally sitting down and crafting the value proposition [and, thus, pricing] with the customer.”

I’ll, of course, post the 451 report once it’s up.

BMC BladeLogic integrating with Chef

Retro BladeLogic Poster

So we’ve built some first-generation integration between Chef and BladeLogic 8.5, which we’re demoing in our booth for the first time here at ChefConf. You can use BladeLogic to call Chef cookbooks and recipes on a push/scheduled basis, and you can reference BladeLogic compliance policies from inside your Chef cookbooks. It’s all very early and not production-ready, but we want to put this integration front and center with the people here at ChefConf and start a conversation about how they want to blend these two approaches to a stable, managed IT infrastructure.

BladeLogic plays an interesting role in the history of the Puppet/Chef/etc. automation world. As I recall, Puppet’s founder Luke Kanies worked on Blade for a short while and, you know, was interested in a better way, which eventually led to Puppet. Also, for those who like startup culture books, Blade was the chief rival of Opsware, where many of the stories in The Hard Thing About Hard Things come from.

Having worked on Dell’s cloud strategy for awhile, I’m always hyper attuned to how the company presents itself on this topic. There was a nice presentation - and demo! - at the Red Hat Summit this year, presented by Sam Greenblatt. Of note is the strong emphasis on Red Hat OpenShift for PaaS, using Docker, and Puppet in Active System Manager (the last previously announced). It’ll be fun to hear more about this, hopefully at the Dell analyst summit in late May.

Update: here’s the recording of the keynote if you’re interested in the whole enchilada.
Having worked on Dell’s cloud strategy for awhile, I’m always hyper attuned to how the company presents itself on this topic. There was a nice presentation - and demo! - at the Red Hat Summit this year, presented by Sam Greenblatt. Of note is the strong emphasis on Red Hat OpenShift for PaaS, using Docker, and Puppet in Active System Manager (the last previously announced). It’ll be fun to hear more about this, hopefully at the Dell analyst summit in late May.

Update: here’s the recording of the keynote if you’re interested in the whole enchilada.
Having worked on Dell’s cloud strategy for awhile, I’m always hyper attuned to how the company presents itself on this topic. There was a nice presentation - and demo! - at the Red Hat Summit this year, presented by Sam Greenblatt. Of note is the strong emphasis on Red Hat OpenShift for PaaS, using Docker, and Puppet in Active System Manager (the last previously announced). It’ll be fun to hear more about this, hopefully at the Dell analyst summit in late May.

Update: here’s the recording of the keynote if you’re interested in the whole enchilada.
Having worked on Dell’s cloud strategy for awhile, I’m always hyper attuned to how the company presents itself on this topic. There was a nice presentation - and demo! - at the Red Hat Summit this year, presented by Sam Greenblatt. Of note is the strong emphasis on Red Hat OpenShift for PaaS, using Docker, and Puppet in Active System Manager (the last previously announced). It’ll be fun to hear more about this, hopefully at the Dell analyst summit in late May.

Update: here’s the recording of the keynote if you’re interested in the whole enchilada.
Having worked on Dell’s cloud strategy for awhile, I’m always hyper attuned to how the company presents itself on this topic. There was a nice presentation - and demo! - at the Red Hat Summit this year, presented by Sam Greenblatt. Of note is the strong emphasis on Red Hat OpenShift for PaaS, using Docker, and Puppet in Active System Manager (the last previously announced). It’ll be fun to hear more about this, hopefully at the Dell analyst summit in late May.

Update: here’s the recording of the keynote if you’re interested in the whole enchilada.
Having worked on Dell’s cloud strategy for awhile, I’m always hyper attuned to how the company presents itself on this topic. There was a nice presentation - and demo! - at the Red Hat Summit this year, presented by Sam Greenblatt. Of note is the strong emphasis on Red Hat OpenShift for PaaS, using Docker, and Puppet in Active System Manager (the last previously announced). It’ll be fun to hear more about this, hopefully at the Dell analyst summit in late May.

Update: here’s the recording of the keynote if you’re interested in the whole enchilada.
Having worked on Dell’s cloud strategy for awhile, I’m always hyper attuned to how the company presents itself on this topic. There was a nice presentation - and demo! - at the Red Hat Summit this year, presented by Sam Greenblatt. Of note is the strong emphasis on Red Hat OpenShift for PaaS, using Docker, and Puppet in Active System Manager (the last previously announced). It’ll be fun to hear more about this, hopefully at the Dell analyst summit in late May.

Update: here’s the recording of the keynote if you’re interested in the whole enchilada.
Having worked on Dell’s cloud strategy for awhile, I’m always hyper attuned to how the company presents itself on this topic. There was a nice presentation - and demo! - at the Red Hat Summit this year, presented by Sam Greenblatt. Of note is the strong emphasis on Red Hat OpenShift for PaaS, using Docker, and Puppet in Active System Manager (the last previously announced). It’ll be fun to hear more about this, hopefully at the Dell analyst summit in late May.

Update: here’s the recording of the keynote if you’re interested in the whole enchilada.
Having worked on Dell’s cloud strategy for awhile, I’m always hyper attuned to how the company presents itself on this topic. There was a nice presentation - and demo! - at the Red Hat Summit this year, presented by Sam Greenblatt. Of note is the strong emphasis on Red Hat OpenShift for PaaS, using Docker, and Puppet in Active System Manager (the last previously announced). It’ll be fun to hear more about this, hopefully at the Dell analyst summit in late May.

Update: here’s the recording of the keynote if you’re interested in the whole enchilada.
Having worked on Dell’s cloud strategy for awhile, I’m always hyper attuned to how the company presents itself on this topic. There was a nice presentation - and demo! - at the Red Hat Summit this year, presented by Sam Greenblatt. Of note is the strong emphasis on Red Hat OpenShift for PaaS, using Docker, and Puppet in Active System Manager (the last previously announced). It’ll be fun to hear more about this, hopefully at the Dell analyst summit in late May.

Update: here’s the recording of the keynote if you’re interested in the whole enchilada.

Having worked on Dell’s cloud strategy for awhile, I’m always hyper attuned to how the company presents itself on this topic. There was a nice presentation - and demo! - at the Red Hat Summit this year, presented by Sam Greenblatt. Of note is the strong emphasis on Red Hat OpenShift for PaaS, using Docker, and Puppet in Active System Manager (the last previously announced). It’ll be fun to hear more about this, hopefully at the Dell analyst summit in late May.

Update: here’s the recording of the keynote if you’re interested in the whole enchilada.

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