Micro Focus has been quite aggressive in the acquisition space over the past five years. As a result, it has acquired several products in its portfolio . ChannelWorld India caught up with Stephen McNulty, president, APJ, Micro Focus, to discuss the results of these acquisitions and how the company plans to reduce its carbon footprint with ample products in its portfolio and the reasons for its interest towards India.
Over the period of five years, Micro Focus has been quite active in the acquisition space. What has been the result of these investments? What is the value proposition?
Until now, the companies we have purchased are in the software infrastructure space and one of the biggest acquisition has been with Borland. Generally, when we buy companies, we create synergies and go-to-market strategies. We sell more things to customers without much effort and cost. Overall, the net result has grown from USD 120 million to USD 1.4 billion. At the same time, we have been able to manage a 46 percent operating margin, based on half-year results which ended in December 2016.
“We are expanding into unified archiving, which will allow us to archive several touch points for customers on platforms like Facebook, Twitter and SMS, as we can capture everything at one place.”
Externally, we have brought about innovation through our customers. In the financial services space, mainframes were designed to be extremely secure because it runs in the customers’ premises and it was never designed to be accessed by mobile devices or third party. Through internal development and acquisitions, we have enabled connectivity to build a mobile application and connect it to mainframe data. We can cater for multi-factor authentication on mobile device to authenticate the person accessing the device and therefore, provide a secure access. From innovation perspective, we have opened up mainframes to allow mobility, IoT and big data and these have been possible because of acquisitions and internal development.
Moreover, we acquired a company called Authasas, a company with expertise in multi factor authentication which allowed us to add OTP, retina thumb and voice over for connectivity access.
At the same time, we are expanding into unified archiving, which will allow us to archive several touch points for customers on platforms like Facebook, Twitter and SMS, as we can capture everything at one place.
Micro Focus has several products in its portfolio. How does it plan to reduce IT carbon foot print?
Micro Focus products and services help customers to reduce their carbon footprint and adopt carbon friendly IT strategies by enabling greater efficiency and longer life from existing technology and equipment.
Micro Focus started by helping companies migrate from mainframe using COBOL on a distributed platform to modern platform. With this, we help companies to decrease their carbon footprint and reduce air-conditioning. We enable companies to become more efficient. We also move products into virtualized environment so that one can put more applications and infrastructure into a virtualized machine rather than having one for each product or application. With our platform, customers have reduced the number of servers in use from a hundred to a handful in some cases.
We also move products into virtualized environment so that one can put more applications and infrastructure into a virtualized machine rather than having one for each product or application. With our platform, customers have reduced the number of servers in use from a hundred to a handful in some cases.
Stephen McNulty, President, APJ, Micro Focus
In turn, Micro Focus continues to develop its own policies to record, monitor and achieve improvements in its own carbon footprint, eg. we are rolling out a new technology, a third party application, which will enable less travel for employees by helping the company to undertake virtualized meetings and unified communications. We have tools and technologies to enable companies to build their own initiatives by making them more efficient.
A couple of years ago, Stuart McGill, CTO mentioned the company is primarily in India for the system integrators (Sis) and development talent wrapped around legacy systems. Is that the same reason for showing interest in India this year?
System integrators (SIs) are very important for us globally and in the APAC region. We have undertaken a major initiative where we train the SIs and go to market with them and have dedicated SIs for the Indian market. They have deep domain expertise, something Micro Focus cannot specialize in, especially across 15 industries across the country. These SIs provide practice based recommendations on how to employ software to customers, find us new customers, drive our products and give us better reach.
With the government of India driving big initiatives like cybersecurity and digital payments, which requires a phenomenal amount of technology, the country has massive potential right now. It creates many opportunities for us and we also have partners who provide their intellectual capacity to customers.
HPE OpenStack is part of SUSE, and Micro Focus can penetrate the Indian market through SUSE. Since cloud and datacenter will become a strong play, you will be leveraging it with the help of partners—TCS and Wipro. That said, what will be your other focus areas this year?
This year, we will be focusing on security. It is a big market, growing at an exponential rate. In the APJ region, security has been growing at 200 percent. Not so many years ago, a cyber-system might have had 100 users, so we had to monitor only 100 people. Then they started to open the data to mobile users, and instead of monitoring just 100 people, one might be monitoring 5 million customers now. And then IoT comes into the picture, where one can go from five billion to trillion devices in a span of five years. Each of these devices is a potential breach point. We will introduce more security products in the days to come. The anticipated merger with HPE is on track and expected to close in Q3 2017. Once that is completed, we will have a broader portfolio of security products to take to our customers.
Also, we will focus on unified communications. Organizations want to monitor all their interactions and there is a growth in Office 365 space. However, Office 365 has basic subscription and basic archiving. We can archive social media interactions, SMSs. It’s an area where we don’t have too many competitors and we expect this to have the one of the fastest growth potential in an organization.
What’s more on the anvil and why? How are you integrating everything?
Our global strategy is all set as we have fairly big projects ahead of us. Overall, different countries have various opportunities for us, and each country demands a localized sales team and strategy. For instance, India provides opportunities of cybersecurity for us. When it comes to integrating products, all of them need not work together. For DevOps, we had products from Borland and then we bought Serena in May last year, which helped us create comprehensive go to market capabilities around DevOps.