JAMF Software Exec Talks Apple’s Evolution, Investing With Bon Iver

8/6/14Follow @XconomyWI

Zach Halmstad can thank a shuttered sandwich shop for his tech career.

While studying music at the University of Wisconsin-Eau Claire around the turn of the millennium, Halmstad was helping to pay the bills by working at the sandwich place. When the business closed down, he took a job at the university providing tech support for faculty members’ Mac computers. He had some experience troubleshooting computers while using software for charting music scores, but the Mac IT gig presented more challenges than he might’ve expected.

“Our counterparts on the Windows side had all these great tools that made it easy for them to do the job,” Halmstad says.

He began building enterprise software tools for university Macs and, in 2002, he decided to turn that into a business. Twelve years later, JAMF Software has grown into an international operation that has stayed loyal to its roots, serving as an anchor tech company in Eau Claire, a city of about 67,000 people about 90 miles east of Minneapolis. The business is about to move into a new $12 million office in the heart of Eau Claire, and the company and its founder are putting money into real estate projects meant to revitalize the city.

But JAMF’s success was no sure thing.

“Back in 2002, very few people considered Apple a viable enterprise solution,” says Halmstad, who serves as JAMF’s co-CEO. “We saw what they were doing with Mac OS X, and believed that their future was incredibly bright. In the early years, people always told us that we’d have to support Windows. We stayed focused on helping the enterprise succeed with Apple … and it has worked out very well for us and our customers.”

Apple has achieved explosive growth over the past decade in large part due to the introduction of the iPhone in 2007 and the iPad in 2010. Halmstad says those products “have certainly complicated our business, but not necessarily in a bad way.”

“Before the iPad and the iPhone started really making their way into the enterprise, we were 100 percent focused on the Mac,” Halmstad says. “We had a small group of competitors, and we were experts in our field. When mobile devices started disrupting the IT space, we quickly adapted to support and manage these devices, but we had a whole new world of competitors that sprouted up.”

That presents challenges, of course, but the added complexity is also a good thing for JAMF. “The iPhone and iPad have greatly increased Apple’s presence and acceptance in the enterprise, not only in mobile, but also on the desktop,” Halmstad says.

JAMF Software logoJAMF turned the corner in 2007, when it grew from less than a handful of people to 13 full-time employees, Halmstad says. Since then, it’s been growing revenue at a 50 to 70 percent clip each year, he says, and has more than 4,000 customers worldwide in the commercial, education, and government sectors. JAMF now has 150 employees in Eau Claire, with another 100 at its Minneapolis headquarters and small offices of about a dozen people apiece in New York, Amsterdam, Sydney, Hong Kong, and Cupertino, CA.

Outside investment has aided company growth over the past four years. JAMF raised $3 million in 2010 in its first funding round, and $30 million last year in a round led by Summit Partners, with participation by GSV Capital, the company says.

So why bootstrap the firm for the first eight years? It was a combination of a bad first experience and a decision to concentrate more on running the day-to-day business, Halmstad says.

Around 2004, JAMF execs took a meeting with a venture capitalist. They “walked in blindly” without a well-rehearsed pitch. The VC wanted to take a 90 percent stake in the company in exchange for a $1 million investment, Halmstad says.

“In these days, Apple was still looked at as very niche, which certainly played into their offer,” Halmstad says. “We didn’t want to give up that much control of what we were doing, so we didn’t really consider it again for a long time. … We thought that we could do more by just focusing on creating value for our customers, so that’s what we focused on.”

At the same time, JAMF has created plenty of value for the Eau Claire economy, turning conventional wisdom on its head by showing that a software company can thrive outside of the typical tech hubs.

When the JAMF team was still small, locals were skeptical it could find enough technical talent in Eau Claire.

“There were people that we met that said, ‘Why would you try to open an office here? You probably found the only four people that could do the job there,’” Halmstad recalls.

JAMF has proven cynics wrong by hiring locals that fit the company’s culture and teaching them how to handle tech support, quality assurance, and other roles. “We started having these great wins with non-technical people inside the city of Eau Claire,” Halmstad says. The company has also found success with hiring interns from local universities and technical colleges, he adds.

Now, Halmstad wants to play a part in shaping the future of the city that raised him.

In a month, JAMF will relocate its Eau Claire staff from a 16,000-square-foot space in a remodeled JCPenney store to a brand new 70,000-square-foot building downtown, Halmstad says.

JAMF is also contributing $500,000 to the Confluence Project, a nearby public-private development that will feature a performing arts center, retail outlets, and university housing.

“We had said internally that we want to be part of the revitalization of downtown,” Halmstad says of JAMF staff.

Halmstad is also personally investing in two Eau Claire hotel renovation projects. The investors in one of the hotels, the Green Tree Inn & Suites, include Justin Vernon, best-known as the singer-songwriter behind Grammy-winning indie folk act Bon Iver.

Vernon and Halmstad are both Eau Claire natives who ran in the same local music circles, but never played in a band together. (However, the last album Halmstad made was recorded a decade ago in the basement of Vernon’s mom’s house, Halmstad says. He played piano in the now-defunct band, The Revelations.)

Halmstad, who has known Vernon since 2000, says it has been fun to collaborate with him on helping to invigorate the city. Halmstad sees the involvement of a world-renowned musician like Vernon as validation that Eau Claire is a viable investment.

“We’re both thankful for the opportunities we’ve had in Eau Claire,” Halmstad says. “We see this great city we grew up in that we love. But we see a lot of things that are missing and a lot of things that can be better.”

Jeff Engel is the editor of Xconomy Wisconsin. Email: jengel@xconomy.com Follow @XconomyWI

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