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By Nick Wakeman

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Nick Wakeman

The digital revolution creates another opportunity for Ken Bajaj to master a paradigm shift

Few people have the track record of Ken Bajaj when it comes to catching a paradigm shift in the market.

With I-Net, Bajaj rode the wave that saw mainframes give way to client-server computing. He sold that company in 1996 for $167 million.

Next up was AppNet, which Bajaj created in 1997 to offer consulting and other services as the start of the internet was becoming a platform for business. He took the company public and eventually sold it to CommerceOne for $2.2 billion in 2000.

Two years later, he reunited with I-Net when he acquired it again for $223 million. Wang was acquired by Getronics in 1999 and the Italian company decided to divest its U.S. government business in 2002. Bajaj formed DigitalNet to buy that business and catch the start of the demand for cybersecurity services.

He then took DigitalNet public in 2003. Then he sold DigitalNet to BAE Systems for $600 million, a nearly 30 percent premium on its share price at the time.

In 2002, Ken Bajaj’s son Sunny was 25 years old and formed his own company -- Digital Management Inc. His father joined in 2009 as chief operating officer.

The focus this time is the changes being driven by mobility and digital services.

“This is the new paradigm shift,” Ken Bajaj said.

DMI has long played in the mobile space and originally specialized in application development, but in recent years it has been building capabilities that dive deeper into the digital transformation that mobile computing enables. These capabilities include app development but also data analytics, cloud computing, mobility and the consulting capabilities to help customers transform their business processes, Ken Bajaj said.

The company has grown to 2,400 employees and about $400 million in revenue offering a variety of services and solutions around mobile device management and end-to-end mobile solutions. About 38 percent of its customers are in the commercial market including health care, financial services and manufacturing.

The rest of the revenue is in the federal market, where it counts a variety of defense and civilian agencies as customers.

Ken Bajaj said his goal is to see the sales mix become more 50-50 but for now some of its marquee customers are in federal.

Last week, the company announced a project with the Labor Department’s Mine Safety and Health Administration for field inspections. DMI built a mobile inspection platform that is cloud-based and helps with data collection, surveying, audits and reporting while in the field.

It is an example of DMI’s end-to-end mobile solutions capabilities, Ken Bajaj said.

“Everyone talks about digital transformation. That is what this is,” he said.

Mine inspectors use a hand-held device that they can dictate observations into, take photos and shoot video. The background information about the mine is already preloaded into their forms.

“When they come out of the mine they can tell you want the issues are,” Ken Bajaj said.

No more going back to the field office. Virtually no delays. The report is done. The Mine Safety and Health Administration has about 1,100 inspectors conducting about 30,000 inspections a year.

Syed Hafeez, director at the agency, said that the time to issue inspection reports has gone from months to minutes.

Ken Bajaj said the market for a mobile inspection platform is large, pointing to agencies such as EPA and state governments and others that regularly conduct data intensive inspections.

“Our intent now is to take the mobile platform and change how agencies do their inspections,” he said.

DMI has built a situational awareness platform for U.S. embassies. Personnel and their families only need to download an app to their phone that allows the embassy to quickly track people if there is an emergency.

The phones have a button on the app that allows people to quickly tell the embassy they are OK or they can hit the SOS button and call for help. It connects directly into the embassy’s security operation.

Digital transformation is difficult and often fails, Ken Bajaj said, because the projects don’t take a mobile first approach.

“Your customers want mobile access to their systems,” he said. “They want a great user experience and if you don’t start with mobile, it doesn’t happen.”

Mobile computing is what is driving digital transformation, he said.

DMI has been using acquisitions to build its capabilities and move into new markets. In May, it acquired Lochbridge, a company heavily involved in the connected car world. Lochbridge also brought a lot of capabilities related to the Internet of Things. Ken Bajaj expects other acquisitions as well.

Ken Bajaj’s son, Sunny, as CEO, is focused on the people side of the business. “I could never be the people manager that he is. He creates a great work environment,” Ken Bajaj said. “My strength is the IT business and understanding what we need to grow.”

He expects the business to grow in the 10-15 percent range and hit a 9-10 percent margin on earnings before interest, taxes, depreciation and amortization. With another acquisition or two, the company could hit $1 billion in revenue and be ready for an initial public offering in 18 months-2 years, Ken Bajaj said.

With Ken Bajaj's track record, don’t bet against it.

Posted by Nick Wakeman on Aug 07, 2017 at 1:24 PM

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