You don't need elite Stanford CS PhDs to maintain a 20 year old enterprise payroll processor or network monitoring service. Polish and Ukrainian devs can do that work perfectly well.

Have a small sales team that does just enough work to cover whatever your churn rate is, and your business will print a stable amount of money for a long time. Combine this with acquiring at low multiples, and it's a decent strategy.

Sure, you might not grow your platform at 80% a year, with massive series A, B, C, D, E, and a unicorn IPO, but you don't need to for the strategy to work over the long term.

This is a FCF play[0]. The lower your COGS, the more FCF it generates every month.

[0]https://corporatefinanceinstitute.com/resources/knowledge/va...

It is smart because they buy up "not so great" businesses and squeeze money out of them.

Where the founder could die on the hill fighting for bright future and burn cash.

While as I read their buying tactics and employee dumping tactics it is despicable. But in life there is also place for scavengers that play important role ... because maybe company they bought would die in even worse way then what they do.

not necessary:

These companies have limited traction, keep them as is and they will die a slowly death after some years.

Or significantly reduce costs (by going offshore - probably with a smaller team), makes numbers much more attractive and sustainable long term.

There is a lot of less critical IT work that can be sweatshopped in India and other Asian countries. In fact considering the huge labour shortage and increasing population decline/aging of G20 countries I see it as inevitable.