Late on Tuesday, MobileIron announced that CEO Barry Mainz is departing the company, and CFO Simon Biddiscombe has been appointed President, CEO, and member of the board. Barry had been CEO since January 2016.
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MobileIron has been growing, though clearly not as fast as investors would prefer. There have been occasional slight misses on various numbers, the stock price remains low, and they faced what has been characterized as sales execution struggles, with some sales leadership turnover over the last year or two.
Why did this happen now? Other than the conditions I just outlined, there doesn’t appear to be any particular major event to cause this—at least not that we can see from the outside.
Instead, it appears that missed revenue this quarter was was the straw that broke the camel's back. Preliminary revenue for Q3 is between $42 million and $43 million; on the Q2 earnings call, their guidance was $44 million to $46 million.
When it comes to billings, on the Q2 call, they revised their 2017 prediction down a bit, to somewhere between $195 and $205 million. Looking at the preliminary Q3 billings ($49.5 to $50.5 million) along with the Q2 and Q1 billings ($44.9 and $45.4 million), this leaves them looking for about $55 to $65 million in billings in Q4, a big but not unrealistic number.
Often when a CFO takes over as CEO, people’s thoughts drift towards cost cutting or a sale. I haven’t heard any sale rumors, so let’s set that aside for now.
The press release mentioned delivering value to shareholders, and Simon’s statement included “leveraging our competitive advantage, strengthening our go-to-market execution, and driving improvements throughout our operations.” His also referenced having the right team in place, echoing what Barry said a quarter earlier when they brought in a new VP of sales for North America.
So, while we weren’t expecting this transition to happen, it seems to be a somewhat run of the mill belt-tightening adjustment—I don’t think MobileIron is in trouble or anything like that. The growth is there, it’s just slower than what investors want, and it sounds like some better execution and streamlining will help things.
Overall, the EMM industry still has plenty of space for MobileIron. Microsoft still isn’t going after high security on their own, and the Microsoft Graph API for Intune and Windows 10 co-management leave the door wide open for other EMM vendors to build businesses. MobileIron surpassed 15,000 customers, and we can be confidant that those customers are generally very serious about mobility.
MobileIron Access has been doing well, and especially now with co-management, they have a direct route into a lot of enterprise PCs. MobileIron can work alongside SCCM to watch Windows 10 device compliance, and then feed that information into Access to do conditional access controls for cloud apps.
Of course VMware AirWatch remains a formidable competitor, and BlackBerry as well in some industries, but again, I think there’s still plenty of space. EMM is still pretty complex, too, which means that it has never become a commodity.
We’ll see what else we learn on October 31 when the final earnings come out. We’re also still waiting for the debut of MobileIron IoT, a project started under Barry, who had IoT experience at Wind River.
We’ll update if we learn anything else. For another take, see our colleague Colin Steele's article over at SearchMobileComputing.com.
Update: A letter from Simon Biddiscome can be found on the MobileIron blog.