Excerpt from: Tech M&A Talk
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| April 03, 2008 | | All Else Being Equal, Best-Of-Breed Software Vendors Are Still The Way To Go | | An empirical analysis by Updata suggests that best-of-breed enterprise infrastructure software vendors – those judged by analysts and opinion-makers (such as trade publications) as offering superior products in their space – command almost a 100% premium over non best-of-breed competitors. Research shows that, over the long term, best-of-breed solutions, which might cost more initially, are a better financial investment. The Aberdeen Group recently reported that in the security software sector, best-in-class deployments have 5 times fewer security incidents than the industry average, with 3 times better containment of deployment costs, and a 10 times better audit pass rate. The implication is that, at least in high-value spaces such as IT security, compliance management, and performance management, a better product drives significant incremental value and justifies premium pricing – both for the product and for the vendor at exit. | | |
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