You're right to highlight the massive switching costs for PME customers @edgescape. And given the recent discussion on Hemler's "7 powers", i'd add network effects, counter-positioning (at least compared to legacy solutions) and process power. And, as time goes on, branding too. It certainly helps explain the margins, ROIC, earnings growth and share price.

Would love to jump back on this rocket, but I'm with @Slomo in that I'll wait for a better buying opportunity. That's been a regretful stance through to now, but whatever i could've/shouldv'e/would've done previously, i find things a tad too ambitious for me to allocate any decent amount of money to right now.

@edgescape, definitely sticky. I don't think they've lost a customer - ever or for a very long time. Excellent evidence of Switching Costs in the 7 Powers vernacular.

However, they only have 7% of the market so far, so maybe it's not captured yet? Probably is just a matter of time but there's room for a well resourced competitor to chase high margins in a large and growing market. Not likely Amazon though.

Re Amazon trying and failing to eat the lunch of others - I'd say this is a feature not a bug.

@Strawman, I'd say branding is big deal for PME already.

I'm used to thinking of branding from a B2C perspective. But I think the reference sites concept you mentioned in @CanadianAussie's interview is a huge factor for PME - they've got the biggest and best in the US.

This is likely a good fit for Helmer's Brand Definition "The durable attribution of higher value to an objectively identical offering that arises from historical information about the seller."

(not identical but differentiated by huge industry acceptance).

Agree Network Effects (trained radiographers), Counter Positioning (streaming) and Process Power (installations) are Benefits and Barriers (i.e. Powers) for PME too.

Helmer looks for at least 1 but ideally 3 of the 7 Powers to be present from memory. We've come up with 5 here without trying too hard.

Value is a whole different assessment, that's the only place PME falls over as an opportunity for me.

Hey @Slomo

Still bitter from pulling the 38 dollar buy when @Strawman slammed a price target of 30 bucks!

haha, there's a lesson in that @edgescape

I didn't understand much at the time when I looked at PME.

I tried not to fall into the same trap when I did my own analysis of GTK, checked all the posts here and looked past the very high PER. Although this did take awhile because I had to really look under the hood which was not done here and elsewhere. I do have to thank that Morgan Stanley report for helping dive deeper though.

GTK though is lesser quality because they have the problem of convincing others to move off competitor software platforms that also happen to be sticky.