- Critical software that costs a small fraction of the operating expenses of a customer has much stronger customer stickiness than peers. Not only does this allow them to weather economic downturns, but it also endows them with pricing power.
- And while mature, market-leading, VMS companies have small addressable markets and little room for growth, this makes them less appealing to typical software acquirers such as Venture Capitalists.
- The company is a compounding machine that fits the profile of the type of company we like to invest in.
For further details see:
Palm Capital - Constellation Software: A Compounding Machine