Jamf Stock Analysis
Today we at JAMF, the software platform to manage Apple devices for enterprises, a wide moat profitable business with a significant runway for growth
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Industry Overview
Apple is the most used OS in the US. Apple stands at 46% of the OS used by users followed by 30% for Windows and 23% for Google. Among Apple’s OS usage 31% is iOS(phones+tablets) and 15% is macOS(laptops). Apple is usually the preferred OS/platform by US employees and students. Using this ecosystem has been studied to boost employee retention, productivity, sales, provide cost savings, and have a quick payback period(return on investment). Due to these reasons, enterprises, and schools and bound to continue to invest in this ecosystem for a long time. Recent reports from IDC show that the market share of macOS is increasing and most of the older windows users are migrating to macOS. Also, it is observed that customers exhibit more stickiness with apple devices as compared to other brands.
Business Overview
Jamf is the standard in Apple Enterprise Management and is the only vertically focused Apple infrastructure and security platform of scale in the world. It provides a cloud-based platform for full lifecycle enterprise IT management of Apple devices. Jamf helps organizations, including businesses, hospitals, schools and government agencies, connect, manage and protect Apple products, apps and corporate resources in the cloud without ever having to touch the devices. Jamf enables deploying new Apple devices to employees in shrink-wrapped boxes, set up automatically and personalized at first power-on, and administered continuously throughout the life of the device.
They have more than 50K+ customers. They currently manage more than 20 million Apple devices for their customers. Jamf is used across industries with most of the top enterprises in these industries adopting them. Jamf is also spread across 100+ countries. They have an NPS score of 54. They also have an active Jamf community called Jamf nation of more than 100K users.
After the recent acquisition of Wandera is closed they will expand their business inorganically to handle all kinds of Apple devices, phones, tablets, and laptops. Also, this acquisition will complete their suite of products offered for schools.
Jamf’s software platform provides the following key benefits:
Provisioning and deployment - Jamf provides a scalable, zero-IT-touch deployment right out of the shrinkwrapped box, personalized for each end-user which makes it possible for IT professionals to easily manage the traditionally challenging tasks of deployment, information encryption, and loading and updating software, without ever touching the device. These seamless cloud deployment capabilities lower the total cost of ownership of Apple devices, enable the native Apple experience in the enterprise and ultimately make Apple devices more effective and secure.
Operating system updates - Jamf offers robust, immediate support for OS feature updates – including Apple’s new M1 chip for Mac – so they can be effortlessly deployed on the same day they are released by Apple. IT teams have the flexibility to automate updates or let users initiate the updates, ensuring employees stay up-to-date with all of the latest security and privacy features, plus leverage new Apple hardware once available.
Application lifecycle and licensing - Jamf gives IT teams the ability to automate key workflows related to the installation and management of applications ensuring a more efficient IT management process. This includes automated targeted distribution of apps to employees based on their work needs, user-initiated app installation via a customized enterprise app store, automated volume purchasing, and license management, and automated tracking and deployment of third-party software updates.
Endpoint protection - Jamf endpoint protection is specifically designed to identify Mac specific threats while preserving user experience and performance. This is done with behavior-based detection and prevention of Apple-specific threats and enterprise visibility into native Apple security tools. Jamf endpoint protection is built for the Mac, architected using native Apple APIs, and designed to co-exist within an organization’s existing enterprise security solutions.
Identity-based access to resources - Jamf enables users to easily and securely connect to enterprise resources with a single cloud-based identity credential, simplified using biometrics on the Apple device. Users can then immediately access all of their corporate applications and shared resources.
Self-service. Jamf extends the Apple experience with an enterprise self-service app that empowers end-users to satisfy their own IT needs. With a single click, users can install apps pre-approved by IT, automatically resolve common technical issues and easily connect and configure enterprise resources, like the nearest printer, without waiting for IT.
Let’s dive into some of the products from Jamf and Wandera.
Jamf Pro
Jamf Pro offers a robust Apple ecosystem management software solution for complex IT environments, serving both commercial businesses and educational institutions. Key capabilities of Jamf Pro include:
Seamless initial device deployment, giving companies the ability to choose between a zerotouch experience or offering a more hands-on device enrollment and deployment
Enabling customization of devices beyond configuration profiles, use policies and scripts for the optimal user experience;
Providing app management flexibility wherein apps can be made available automatically to users or through an enterprise self-service catalog;
Granting users the ability to update software and maintain their own devices through Jamf’s brandable selfservice application, automating ongoing inventory management, such as automatic collection of hardware, software and security configuration details from Apple devices, creating custom reports and alerts, and managing software licenses and warranty records
Securing Apple devices by leveraging native security features, such as encryption, managing device settings and configurations, restricting malicious software and patching all Apple devices without the need for user interaction.
Jamf Now
Jamf Now is an intuitive, pay-as-you-go Apple device management software solution for small-to-medium-sized businesses (“SMBs”). Jamf Now prioritizes simplicity through a design that is targeted for organizations with limited or no IT resources, and it can be adopted by such organizations without engaging Jamf sales, training, or services personnel. Jamf Now allows customers to set up their own accounts to enroll their Apple devices and immediately benefit regardless of any prior experience with Jamf. Jamf Now facilitates the consistent configuration of devices remotely, provides a 360-degree view of inventory and remotely enforces passcodes, encryption, installed software and locking or wiping of Apple devices.
Jamf School
Jamf School is a purpose-built software solution for educators and is supported by apps that empower teachers to create an active and personal learning environment. Teachers using Jamf School are able to quickly and easily control all Apple devices in their classroom, which ultimately aids the focus of students. Teachers design lesson plans to leverage content from Apple’s App Store and are able to easily deploy these lessons to students. They can also restrict specific functions during assessments, and control what content and resources students have access to on their iPads at a specific time. This functionality works seamlessly whether the teacher and student(s) are in the same physical classroom or if they are learning from home or in different locations. With Jamf School, parents can use their personal iPhone, iPad or Apple Watch to govern the access children have when using their school-issued iPads at home. Parents can control and limit their children’s device usage, applications and functionality when the student is not in the school lessons. Jamf School also engages and connects the student. Students can gain automatic access to subject-specific materials and applications, while unrelated or irrelevant content is hidden to avoid distraction. Through a self-service portal, students are also able to choose applications from an approved list of content, empowering them to have control over their learning.
Jamf Connect
Jamf Connect gives users the ability to provision their new Apple devices by simply entering their cloud identity the first time the device is powered on. The Apple account is then automatically set up, synchronized and used to grant rights on the device itself, providing immediate value to the user. Jamf Connect transforms how users connect to their corporate identity and therefore provides users with a seamless connection to corporate resources. Jamf Connect gives IT administrators the ability to monitor all company Mac devices and control who is accessing them, providing comfort that both the device and corporate information are protected.
Jamf Protect
Jamf Protect creates customized telemetry and detections that give enterprise security teams unprecedented visibility into their Macs, extending Apple’s security and privacy model to the enterprise while upholding the Apple user experience. This product provides capabilities for mapping the security posture of a customer’s Mac fleet against the Center for Internet Security benchmarks; extending information security visibility into macOS built-in security tools for awareness and improved reporting, compliance, and security; receiving real-time alerts to analyze activity on the device and choose whether to proactively block, isolate, or remediate threats. Its also used for preventing the execution of known macOS malware and quarantine the applications to keep end users safe; supporting the latest OS from the first day it’s available to ensure users receive the latest and most pressing security updates while providing a best-in-class macOS experience.
The following products will be primarily acquired from the Wandera Acquisition:
Threat Defense Product - Mobile Threat Defense (MTD)
This product monitors endpoints for vulnerabilities, from escalated privileges to outdated OSs. It provides iOS+ app security with static and dynamic analysis with over 90mm total apps supported. It also provides Zero-day phishing prevention, in-network protection purpose-built for iOS, monitors for data leaks and prevent sensitive data loss, and safeguards user privacy.
Data Policy Product
This product is used to enforce acceptable use & data limits in the cloud. It provides real-time analytics and shadow IT discovery. The policies can be unique context-based policies (by network interface, risk level, location, etc.).
Private Access product(VPN/SSO alternative)
Enables Zero Trust Network Access (ZTNA)for any app in corporate data center or private cloud. This product uses a Wireguard protocol optimized for high security and throughput and Distributed global edge network for super-fast connectivity. This leads to a Lower total cost of ownership and significantly improve user experience vs. legacy VPN
Jamf’s Apple Relationship
Jamf closely works with Apple’s worldwide developer relations organization in an effort to support all new Apple innovations the moment their hardware and software are released. Jamf and Apple have formalized several contractual agreements:
In 2010, Apple became a Jamf customer, using Jamf to deploy and secure its fleet of Apple devices internally.
In 2011, Apple became a Jamf channel partner in the education market, reselling Jamf to K-12 and higher education organizations within the United States. In 2012, Apple expanded their channel relationship by offering Jamf to businesses through Apple retail stores in the United States.
In 2014, Jamf became a member of Apple’s Mobility Partner Program, which focuses on solution development and effective go-to-market activities.
In addition to these contractual relationships, Apple and Jamf personnel frequently join forces to influence and collaborate as we work with customers, helping them succeed with Apple.
Jamf TAM
Jamf estimates their TAM to be $12.2B. This is derived by multiplying the number of Apple devices/Units used in businesses/education with the ASP(Average Selling price of Jamf for one unit/device). The recently announced acquisition of Wandera will bump up this TAM to $18B.
Jamf Growth Strategies
The key elements of Jamf’s growth strategy are:
Extend technology leadership through R&D investment and new products, pursuing select technology acquisitions in order to enhance existing solutions, add new capabilities and deployment options, and expand use cases.
Continue developing and enhancing Apple-specific functionality for certain verticals, such as education, healthcare, and hospitality, to help these organizations serve the changing needs of their students, teachers, patients, and workers.
Grow customer base with targeted sales and marketing investment and channels.
Increase sales to existing customers to deliver further value by growing the customers’ number of Apple devices currently in use; selling additional Jamf products; expanding customers’ use of Jamf from one Apple product, like Mac, to additional Apple products used within the organization, like iPad, iPhone, and Apple TV
Continue to expand their current large international presence by making investments in their international sales and marketing channels to take advantage of this market opportunity.
Continue investing in the Jamf Nation community platform to ensure that the community remains a vibrant forum for discussion and problem-solving for Jamf users.
Jamf’s software platform has published APIs to extend its value with other third-party or custom solutions. As of December 31, 2020, more than 200 integrations and value-added solutions were published on the Jamf Marketplace. These solutions extend the value of Jamf, protect customers’ existing IT investments and encourage greater use and expansion of Jamf within the enterprise.
Competition & Competitive Advantage
This is a very unique business with a wide moat as there are no real competitors in this domain. Jamf’s cloud software platform is the only vertically focused Apple infrastructure and security platform of scale in the world. Their competition is generally comprised of large cross-platform enterprise providers and early-stage providers of Apple enterprise solutions. Large enterprise providers, such as VMWare, Microsoft, and IBM typically compete with Jamf on one particular solution (e.g. device management, identity, or endpoint-security) intended for cross-platform use and not specialized for Apple. Jamf is inspiring a number of startups to follow/compete with them on delivering an Apple ecosystem vision.
Business Risks
Jamf is heavily dependent on the success of the Apple ecosystem for its own sucess. Any changes in Jamf’s continued relationship with Apple can also lead to issues.
There is the potential for impact of customer dissatisfaction with Apple or other negative events affecting Apple services and devices, and failure of enterprises to adopt Apple products indirectly affecting Jamf.
The adverse impact of changes in features and functionality by Apple on Jamf’s engineering focus or product development efforts.
Key SaaS/Financial Metrics
ARR - $308M
Total Revenues - $289M
ARR Growth - 37%
Revenue Growth - 34%
Subscription Revenue as part of Total revenues - 92%
Gross Margin - 83%
Free Cash Flow - $61M
Free Cash Flow as part of Total revenues - 21%
Net Expansion Rate - 117%
Rule of 40 - 50%+ (37% growth + 21% FCF)
Final Thoughts
Jamf is a wide moat, profitable, high-growth business with high customer retention. Their current organic and acquisitive growth strategy looks promising, and they have a large runway to enjoy growth for a long time.