Jun
30
2020
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Apple device management company Jamf files S-1 as it prepares to go public

Jamf, the Apple device management company, filed to go public today. Jamf might not be a household name, but the Minnesota company has been around since 2002 helping companies manage their Apple equipment.

In the early days, that was Apple computers. Later it expanded to also manage iPhones and iPads. The company launched at a time when most IT pros had few choices for managing Macs in a business setting.

Jamf changed that, and as Macs and other Apple devices grew in popularity inside organizations in the 2010s, the company’s offerings grew in demand. Notably, over the years Apple has helped Jamf and its rivals considerably, by building more sophisticated tooling at the operating system level to help manage Macs and other Apple devices inside organizations.

Jamf raised approximately $50 million of disclosed funding before being acquired by Vista Equity Partners in 2017 for $733.8 million, according to the S-1 filing. Today, the company kicks off the high-profile portion of its journey towards going public.

Apple device management takes center stage

In a case of interesting timing, Jamf is filing to go public less than a week after Apple bought mobile device management startup Fleetsmith. At the time, Apple indicated that it would continue to partner with Jamf as before, but with its own growing set of internal tooling, which could at some point begin to compete more rigorously with the market leader.

Other companies in the space managing Apple devices besides Jamf and Fleetsmith include Addigy and Kandji. Other more general offerings in the mobile device management (MDM) space include MobileIron and VMware Airwatch among others.

Vista is a private equity shop with a specific thesis around buying out SaaS and other enterprise companies, growing them, and then exiting them onto the public markets or getting them acquired by strategic buyers. Examples include Ping Identity, which the firm bought in 2016 before taking it public last year, and Marketo, which Vista bought in 2016 for $1.8 billion and sold to Adobe last year for $4.8 billion, turning a tidy profit.

Inside the machine

Now that we know where Jamf sits in the market, let’s talk about it from a purely financial perspective.

Jamf is a modern software company, meaning that it sells its digital services on a recurring basis. In the first quarter of 2020, for example, about 83% of its revenue came from subscription software. The rest was generated by services and software licenses.

Now that we know what type of company Jamf is, let’s explore its growth, profitability and cash generation. Once we understand those facets of its results, we’ll be able to understand what it might be worth and if its IPO appears to be on solid footing.

We’ll start with growth. In 2018 Jamf recorded $146.6 million in revenue, which grew to $204.0 million in 2019. That works out to an annual growth rate of 39.2%, a more than reasonable pace of growth for a company going public. It’s not super quick, mind, but it’s not slow either. More recently, the company grew 36.9% from $44.1 million in Q1 2019 to $60.4 million in revenue in Q1 2020. That’s a bit slower, but not too much slower.

Turning to profitability, we need to start with the company’s gross margins. Then we’ll talk about its net margins. And, finally, adjusted profits.

Gross margins help us understand how valuable a company’s revenue is. The higher the gross margins, the better. SaaS companies like Jamf tend to have gross margins of 70% or above. In Jamf’s own case, it posted gross margins of 75.1% in Q1 2020, and 72.5% in 2019. Jamf’s gross margins sit comfortably in the realm of SaaS results, and perhaps even more importantly are improving over time.

Getting behind the curtain

When all its expenses are accounted for, the picture is less rosy, and Jamf is unprofitable. The company’s net losses for 2018 and 2019 were similar, totalling $36.3 million and $32.6 million, respectively. Jamf’s net loss improved a little in Q1, falling from $9.0 million in 2019 to $8.3 million this year.

The company remains weighed down by debt, however, which cost it nearly $5 million in Q1 2020, and $21.4 million for all of 2019. According to the S-1, Jamf is sporting a debt-to-equity ratio of roughly 0.8, which may be a bit higher than your average public SaaS company, and is almost certainly a function of the company’s buyout by a private equity firm.

But the company’s adjusted profit metrics strip out debt costs, and under the heavily massaged adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) metric, Jamf’s history is only one of rising profitability. From $6.6 million in 2018 to $20.8 million in 2019, and from $4.3 million in Q1 2019 to $5.6 million in Q1 2020. with close to 10% adjusted operating profit margins through YE 2019.

It will be interesting to see how the company’s margins will be affected by COVID, with financials during the period still left blank in this initial version of the S-1. The Enterprise market in general has been reasonably resilient to the recent economic shock, and device management may actually perform above expectations given the growing push for remote work.

Completing the picture

Something notable about Jamf is that it has positive cash generation, even if in Q1 it tends to consume cash that is made up for in other quarters. In 2019, the firm posted $11.2 million in operational cash flow. That’s a good result, and better than 2018’s $9.4 million of operating cash generation. (The company’s investing cash flows have often run negative due to Jamf acquiring other companies, like ZuluDesk and Digita.)

With Jamf, we have a SaaS company that is growing reasonably well, has solid, improving margins, non-terrifying losses, growing adjusted profits, and what looks like a reasonable cash flow perspective. But Jamf is cash poor, with just $22.7 million in cash and equivalents as of the end of Q1 2020 — some months ago now. At that time, the firm also had debts of $201.6 million.

Given the company’s worth, that debt figure is not terrifying. But the company’s thin cash balance makes it a good IPO candidate; going public will raise a chunk of change for the company, giving it more operating latitude and also possibly a chance to lower its debt load. Indeed Jamf notes that it intends to use part of its IPO raise to “to repay outstanding borrowings under our term loan facility…” Paying back debt at IPO is common in private equity buyouts.

So what?

Jamf’s march to the public markets adds its name to a growing list of companies. The market is already preparing to ingest Lemonade and Accolade this week, and there are rumors of more SaaS companies in the wings, just waiting to go public.

There’s a reasonable chance that as COVID-19 continues to run roughshod over the United States, the public markets eventually lose some momentum. But that isn’t stopping companies like Jamf from rolling the dice and taking a chance going public.

Jun
26
2020
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Fleetsmith customers unhappy with loss of third-party app support after Apple acquisition

When Apple confirmed it had acquired Fleetsmith, a mobile device management vendor, on Wednesday, it seemed like a straightforward purchase, but Fleetsmith customers quickly learned a key piece of functionality had stopped working  — and many weren’t happy about it.

Apple systems administrators began complaining on social media on the morning of the acquisition announcement that the company was no longer allowing them to connect to third-party applications.

“Primarily Fleetsmith maintained a third-party app catalog, so you could deploy things like Chrome or Zoom to your Macs, and Fleetsmith would maintain security updates for those apps. This was the main reason we purchased Fleetsmith,” a Fleetsmith customer told TechCrunch.

The customer added that the company described this functionality as a major feature in a company blog post:

For apps like Chrome, which are managed through the Fleetsmith Catalog, we handle all aspects of testing, packaging, triage, and deployment automatically. Whenever there’s an update (including security patches), we quickly add them to the Catalog so that our customers can enforce the latest version. In this case, we had the Chrome 78.0.3904.87 patch up within a couple hours of the update dropping.

As one system administrator pointed out, being able to manage Chrome browser security in an automated way was a huge part of this, and that was also removed along with third party app support.

As it turned out, Apple had made it clear that it was discontinuing this feature in an email to Fleetsmith customers on the day of the transition. The email included links to several help articles that were supposed to assist admins with the transition. (The email is included in full at the end of this article.)

The general consensus among admins that I spoke to was that these articles were not terribly helpful. While they described a way to fix the issues, they said that Apple has turned what was a highly automated experience into a highly manual one, effectively eliminating the speed and ease of use advantage of having the update feature in the first place.

Apple did confirm that it had responded to some help ticket requests after the changes this week, saying that it would soon restore some configurations for Catalog apps, and was working with impacted customers as needed. The company did not make clear, however, why they removed this functionality in the first place.

Fleetsmith offered a couple of key features that appealed to Mac system administrators. For starters, it let them set up new Macs automatically out of the box. This allows them to ship a new Mac or other Apple device, and as soon as the employee powers it up and connects to Wi-Fi, it connects to Fleetsmith, where systems administrators can track usage and updates. In addition, it allowed System Administrators to enforce Apple security and OS updates on company devices.

What’s more, it could also do the same thing with third-party applications like Google Chrome, Zoom or many others. When these companies pushed a new update, system administrators could make sure all users had the most recent version running on their machines. This is the key functionality that was removed this week.

It’s not clear why Apple chose to strip out these features outlined in the email to customers, but it seems likely that most of this functionality isn’t coming back, other than restoring some configurations for Catalog apps.

Email that went out to Fleetsmith customers the day of the acquisition outlining the changes:

 

Attempts to reach Fleetsmith founders for comment were unsuccessful. Should that change we will update the article.

Jun
17
2020
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‘One day we were in the office and the next we were working from home’

Ryan Easter couldn’t believe he was being asked to run a pandemic business continuity test.

It was late October, 2019 and Easter, IT Director and a principal at Johnson Investment Counsel, was being asked by regulators to ensure that their employees could work from home with the same capabilities they had in the office. In addition, the company needed to evaluate situations where up to 50% of personnel were impacted by a virus and unable to work, forcing others to pick up their internal functions and workload.

“I honestly thought that it was going to be a waste of time,” said Easter. “I never imagined that we would have had to put our pandemic plan into action. But because we had a tested strategy already in place, we didn’t miss a beat when COVID-19 struck.”

In the months leading up to the initial test, Johnson Investment Counsel developed a work anywhere blueprint with their technology partner Evolve IP. The plan covered a wide variety of integrated technologies including voice services, collaboration, virtual desktops, disaster recovery and remote office connectivity.

“Having a strategy where our work anywhere services were integrated together was one of the keys to our success,” said Easter. “We manage about $13 billion in assets for clients across the United States and provide comprehensive wealth and investment management to individual and institutional investors. We have our own line of mutual funds, a state-chartered trust company, a proprietary charitable gift fund, with research analysts and traders covering both equity and fixed income markets. Duct taping one-off solutions wasn’t going to cut it.”

Easter continued, “It was imperative that our advisors could communicate with clients, collaborate with each other and operate the business seamlessly. That included ensuring we could make real-time trades and provide all of our other client services.”

Five months later, the novel coronavirus hit the United States and Johnson Investment Counsel’s blueprint test got real.

Nov
04
2019
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Microsoft launched Endpoint Manager to modernize device management

Ever since the days of Windows NT, the Microsoft System Center Configuration Manager (better known as ConfigMgr) has allowed companies to manage the increasingly large number of devices they issue to their employees. Then, back in 2011, the company also launched Intune, its cloud-based endpoint management system for corporate and BYOD devices. These days, most enterprises that use Microsoft’s tools use ConfigMgr to manage their PCs and then opt for Intune for mobile devices — and that’s a complex system to manage, even for sophisticated IT departments. So today, at its annual Ignite conference for IT professionals, Microsoft is announcing a way forward for these users to modernize their systems with the launch of the unified Microsoft Endpoint Manager.

As Brad Anderson, Microsoft’s corporate VP for Microsoft 365, told me, he takes some blame for this. “A lot of this falls on my shoulders because we just allowed everything to get complex. So we’re just simplifying everything,” he said. “So really at the core, what we think modern management is that modern management is it’s management that is driven by cloud intelligence.”

The general idea here, Anderson explained, is that in earlier eras of IT management, Microsoft and its partners didn’t have the tools to collect and analyze all of the signals it received from these management tools. That’s obviously not a problem anymore today and the company can use the telemetry it gets from a company’s PC deployments, for example, to figure out where there are problems.

“One of the things that we’re able to do is be learned as cloud-scale as we can help organizations improve their end-user experience,” Anderson noted. Common issues with that experience could be extremely long boot times, which slow down and frustrate employees, or issues with the delivery of important security patches. Today, all of this is often still managed by spreadsheets and complex security policies that are administrated manually — and Anderson argues that these days, you always have to think about security and management together anyway.

To quantify this user experience, Microsoft is also introducing what it calls the Microsoft Productivity Score, which looks at both how employees are working and using their tools, as well as how their technology is enabling them (or not) to do so. “The Productivity Score is all about helping an organization understand the experience their users are having — and then giving them the insights and the actions on what they can do to improve that,” explained Anderson.

Over the course of the last few months, Microsoft actually worked with some large customers and took over the management of their Windows and Office deployments, meaning those machines ran nothing but Microsoft 365 agents (and a control group that was managed in a more traditional way). The devices with the modern management system saw an 85% reduction in boot time and an 85% reduction in crashes and a doubling of battery life. Unsurprisingly, the employees that used the devices were also far happier.

As far as the device management experience goes, the new Endpoint Manager and the licensing changes that come with that are meant to not just simplify the branding but also the experience. And Microsoft definitely wants people to move to this modern system, so it’s giving everybody who has ConfigMgr licenses Intune licenses, too, so that they can co-manage their PCs with both tools and get access to the cloud-based features of Intune. The Microsoft Endpoint Manager console will show a single view of all devices managed by either product. “It’s all about simplifying — and we’re taking that simplifying deep and broad from a branding, licensing and product perspective,” said Anderson.

Today, ConfigMgr and Intune manage well over 190 million Windows, iOS and Android devices. Yet Microsoft knows that not every company is ready to move to this modern device management system just yet. That’s why it’s making these licensing changes to help get people on board, but also leaving the existing systems in place and giving them an onramp to move to provisioning new machines to be cloud-managed, for example.

Sep
06
2017
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Axonius wants to help businesses manage all of their devices; raises $4M seed round

 Axonius wants to help enterprises manage their fast-growing number of mobile, compute and IoT devices that now use their networks and in the cloud. The idea here is to provide these companies with a single platform that allows them to see which devices are active on their networks and control them. This, in turn, enables enterprises to plug potential security holes. Read More

Feb
22
2017
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MobileIron adding IoT management to its arsenal

Internet of Things connecting in cloud over city scape. MobileIron, which went public in 2014, has been known mostly for helping large companies manage mobile devices, especially in a time when people tend to bring their own. Today it announced it was expanding that mission to the Internet of Things.
When you think about it, it’s a logical move for a company that is used to overseeing a large number of devices and helping IT keep them secure. Read More

Nov
11
2014
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Okta’s New Mobile Device Management Tool Separates Work And Personal Data

Concept photo of network of people next to a mobile phone. Okta, which to this point has been known as a company for managing identity in the cloud, made the leap to mobile device management today, announcing a new product called Okta Mobility Management that provides a simple way to separate work and personal data, giving IT controls they need over work content without compromising personal content on the phone. It’s not a secret that many… Read More

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