Converage of functions, products and industries typically also leads to periods of time where the same product, sold by different retailers, might produce expected values that are differrent as well. A single wide area data connection of the same type and capabilities, between the same locations, might be deemed to have an asset value that varies by the company that owns that asset.
So a connection sold by a managed service provider could, in principle, be valued differently from the same sort of connection, between the same locations or entities, if sold by a data center or telco. The reason is that revenue earned by a large and dominant data center is valued differently than revenue earned by a telco, which in turn can be diifferent than the same service sold by a managed service provider.
If a typical larger telco is valued between 10 times and 13 times EBITDA, it seems likely that a software-defined interconnection supplier might be valued between 15 times to 20 times EBITDA, all other things being equal.
But Megaport, which offers software-defined private network connections, might be valued at about 31 times EBITDA.
So there is additional value being assigned directly for the virtual capabilities, even if the “product” purchased is largely identical to products sold in the traditional way by connectivity providers.
To be sure, as always, a wide variety of factors combine to produce a valuation figure. Growth rates, competition, business moats, profit margins, capital intensity and geography all play some role.
Still, the same product, sold by different entities, can carry significantly-different estimations of value. A dollar or euro of connection revenue might be valued differently if earned by a telco, data center, managed service provider or other entity.
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