It struck me during my conversation with recently appointed Ivanti CEO Jim Schaper that his current strategy of driving organic growth for the company, backed by private equity, alongside a smart acquisition strategy, driven by customer success, is very similar to that of Infor in recent years. And that's a big compliment, if you consider how Infor turned its fortunes around and ended up being acquired by one of the largest private companies in the US, Koch Industries.
Since our conversation this week, I then found out that Schaper was appointed as CEO in January 2020 alongside a new executive team, which is made up of a majority of former-Infor leadership. So it seems the parallels I was spotting weren't just coincidence.
And that's no bad thing - as I've already noted, Infor has done an incredible job over the past decade or so of building a coherent applications strategy in the cloud, built around user-centred design, going after markets that it really understands. If Schaper can replicate that success at Ivanti, he's on to a winner.
I'll admit that Ivanti wasn't particularly on my radar until recently, until it acquired Cherwell - a competitor to ServiceNow - which operates in the enterprise service management space, of which I follow fairly closely. And so I was keen to speak to Schaper to get a better understanding of what Ivanti has planned for the Cherwell acquisition and how it fits with its broader product portfolio.
And it certainly seems that Ivanti is a company on the move with a strategy that seems particularly attuned to the needs of the market, where organisations are rethinking their working environment since the COVID-19 pandemic hit. Ivanti has a unique approach to the ‘anywhere workplace' problem, where it offers an integrated platform that incorporates ITSM/ESM, endpoint management, coupled with security.
In other words, as buyers realise that their employees aren't going to be constrained to the four walls of their office, they will need solutions that not only can understand and manage their variety of endpoints, virtually, but also service these employees remotely. But targeted specifically at the mid-market, which Schaper argues isn't being pursued by the likes of ServiceNow and BMC. But more on this later.
Schaper explains that his motivation for joining Ivanti was spurred by the strategic direction of the company. He says:
I got involved, interestingly enough, by happenstance. They asked me to join the board, and then they asked me to join as chairman. And then as we discussed the long term future of the company and what they wanted to do with Ivanti it became intuitively clear to me that we needed to upgrade the management team to put ourselves in a position to do exactly what we're doing, which is return to organic growth and supplement that with a series of ongoing acquisitions
When I got here, what I really was intrigued by was two or three different things. Number one I loved the markets that we were in. I liked the characteristics of the market - large, growing, not a lot of lower end competitors. You're really just competing against the big guys which in a lot of ways is frankly easier.
Number two, great employees. Number three, we had a very diverse, non-concentrated customer base, which means we are insulated from anything that might occur, which has proven to be true, especially since we've all been dealing with COVID.
Ivanti's ‘fresh start', as it could be viewed, began in January 2020. This is when it emerged as an acquirer again and later that year closed deals on both Pulse Secure and MobileIron. Schaper says that Ivanti has three core pillars - security, endpoint management and ITSM/ESM.
On the MobileIron buy, Schaper says that this was really "hand in glove". Ivanti already had the capability to track endpoints at the desktop level, but MobileIron brought the capability to bring that to mobile devices too. When looking at Pulse Secure, whilst it operates in the relatively mature market of securing VPNs, what interested Ivanti was the development work it is doing on zero trust security and access in the cloud. Schaper says that this will fit with its ITSM/ESM platform, securing all endpoints, and will be grown dramatically as a product line from July.
And then we get to Cherwell, which closed last week. Schaper notes that this may be perceived as a more unusual target, given that Ivanti already operates in ITSM, but that it was about extending the company's technology assets in the market. He explains:
If you look at it from the outside in, it's a competitor buying a competitor. Having been involved with another company where we were serial acquirers, where we acquired a lot of competitors, that's one of the things that we are primarily not going to do here, because it's very difficult. You've got duplicate products, you've got redundant products, you've got customers that want to know which product is going to survive, all of that type of thing.
But we began to look at Cherwell and this acquisition all came down to the technology. We really didn't want to buy redundant technology, we wanted to buy complimentary products and solutions for our customers, and that's what we've done. It just simply extends us pretty dramatically in the lines of business that they've built. We love the zero/no-code platform that they've built. And we will end up using our security offerings as yet another line of business which will continue to differentiate us from anybody else in the industry.
The use case
Ivanti says that its primary focus is solving the ‘anywhere workplace' use case, which as we all know, has become an imperative for organizations in the wake of the COVID-19 pandemic. Schaper notes:
It's not just a tagline - it has fundamentally changed the markets forever. It's highly unlikely that most industries are ever going to go back to the way it was. And so you're always going to have this hybrid environment of people working from home, people working in the office, a combination of both.
And so, we believe that there is an intersect point between ITSM and ESM, because it's almost all virtual now, and the ability to identify every point on a network, or in the cloud, and then secure it. As well as look at the security infrastructure business, meaning the VPN, as well as patching everything.
So it's not just a matter of first identifying what the endpoints are, and then securing them. You have to know what your endpoints are, and then you equally have to know what applications those endpoints are downloading. And then you equally have got to be able to do that virtually from your ITSM service desk.
This rings true to what we are seeing from buyers, which as our readers will know, we speak to regularly. Many of them are grappling with increased complexity, particularly around service management, as they look to deliver services to their employees (and customers as it happens) across a variety of endpoints, outside of the firewall.
There are clearly some already big players in this space, most notably ServiceNow and BMC, but Schaper believes Ivanti has a unique opportunity to not only in terms of product, but to capture the attention of mid-market buyers.
What we're really going to end up with is an integrated platform with our existing endpoint management solutions and security solutions, where a customer is going to have a single pane of glass. They're not going to have to flip in and out of applications, they're going to be able to control and really see what's on their endpoints, secure what's on those endpoints, secure their VPN, or zero trust in the cloud, as well as their IT Service Management and their lines of business. It will be one single integrated solution over time, with one common user interface, a single pane of glass, and we're not aware of anybody else doing that.
If you look at ServiceNow, and I know McDermott [CEO of ServiceNow], I competed with him for years, he's taking them wider and wider, with a platform as a service approach, he really wants to be the next Salesforce. We've seen no evidence that they are attempting to come down market, because that product is a big product, right? And there aren't very many companies that can take a large, complex product and move it down market cost effectively. If you look at BMC, and I know BMC well because I was on their public board for a while, and then I was part of the private equity firms that took them private, and was on their board for a few more years, they play at the very upper end of the complex market. And that's not where we play.
In our discussion Schaper shared that Ivanti is now generating approximately $1.2 billion in annual revenues and has over 20% of organic bookings growth. If you apply the inorganic growth through acquisitions, the company has doubled in size in the last six months.
To finish, I asked Schaper how he's going to measure success over the long term for Ivanti. And whilst the financial metrics were part of this, his primary metric is going to be customer success - which is something at diginomica we like to hear. He says:
You know, when we got here, one of the things that we invested heavily in is customer success. A lot of people will talk about it, very few will make the necessary investments in driving an organisation to that. And you can measure that in a lot of ways.
You can measure it by your customer satisfaction ratings, which continue to improve and are very high already. For me it all comes down to customer satisfaction scores - if your customer satisfaction scores are high, that's going to drive all your financial metrics that you could ever look at, from customer retention, renewal, to net new business.
Certainly a company on the move and one to watch. Ivanti's strategy appears to be cogent and it is going after a segment of the market and a use case that has high demand. This will obviously all come down to execution. The work on customer success needs to be invested in heavily and we'd like to see how it is thinking through user centred design for its applications - when you're managing complex environments, this is essential. Equally, we look forward to speaking to customers over the year that are taking advantage of the ‘single pane of glass' that Ivanti is proposing. As ever, the proof will be in the customer testimonials. But Schaper gave a convincing pitch and we look forward to tracking this closely.