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Oct 1, 2012 12:00 AM
GMC SOFTWARE’S GUIDING FORCE REFLECTS ON THE IMPACT OF THE NEOPOST ACQUISITION, GMC’S EVOLUTION OVER THE PAST 18 YEARS AND WHY WE WON’T BE SEEING HIM ON A SHUFFLEBOARD COURT ANY TIME SOON.
On July 12, 2012, mailroom solution provider Neopost announced it had acquired GMC Software Technology. “For Neopost, this acquisition marks an important step in its ambition to diversify and grow its revenues beyond support of physical mail,” observed InfoTrends’ Kaspar Roos. “For GMC, the acquisition allows the company to have a bigger impact in the enterprise space, as well as to benefit from Neopost’s strong presence in the small- to mediumbusiness (SMB) market.”
The Neopost/GMC acquisition reflects something of a trend: HP (Exstream), EMC (Document Sciences) and Pitney Bowes (Group1) have made similar moves in recent years. With $1.2 billion in sales for 2011, offices in 18 countries and 5,600 employees, Neopost is considerably larger than GMC, which is a $43-million company with 300 employees throughout Europe, America and Asia. From a business perspective, the Neopost/GMC merger is logical: Neopost can pursue growth opportunities beyond its mailing equipment comfort zone while GMC gains access to Neopost’s midlevel market base.
The move also provides GMC Software Technology CEO René Müller with an exit strategy. “As neither of my two daughters showed any interest in taking the reins at GMC, the acquisition ensures the future of GMC,” Müller said.
Beyond maintaining GMC’s independence and securing his employees’ futures, Müller is pleased with his ongoing role: “My contract is 12 months firm,” he explained. “I have twelve months as CEO, with an optional six months, and then another year on the board, so I’m happy. It’s going to be a long transition period, but it will allow me to ensure the success of GMC.”
Reaction has been favorable. “I’m very happy with the response that I got,” Müller said. “There’s been a lot of very encouraging, positive, satisfied messages from the employees, from the customers and from the partners.”
Previously, GMC has worked with Neopost as both a value-added reseller and OEM, dealings that made Müller comfortable with the mailroom company. Also, having observed Neopost’s 2009 acquisition of Satori Software, Müller could see both the synergies on the software side as well as a compatible management structure.
“I want to leave a successful company, where people are happy and grow,” René stressed. “Neopost has a decentralized approach—Satori kept its management and is being run totally independently—and it has a lot of synergies with Neopost. We want to do exactly the same.” Remaining a stand-alone entity was a top priority. “We will run independently,” René reiterates. “We’re not going to be integrated.” Müller also wanted GMC to remain “printer agnostic.” Had it been acquired by a digital printer vendor (as Exstream was by HP), the company would likely have been restricted to working only with the acquiring company’s equipment.
THE MULTICHANNEL MINDSET
GMC’s software is fully capable of driving the latest and greatest machines at rated speeds. “Development for print output is only a minor part of our business right now,” Müller says. The real challenge, Müller explains, is maintaining a multichannel mindset. “Our people have to get used to the idea that now, [print jobs are no longer] an A4 or an A3 piece of paper. [Today we are dealing with jobs that are] created with multiple sizes and multiple resolutions,” he explains. “Moreover, jobs must be Internet and mobile compatible—you can’t just send an A4 page to your iPhone or BlackBerry. [We must be able to] detect which device is asking for the information and then send the information so that it’s readable and actionable.”
A ROUGH START
Müller has been described as a selfconfident man with a strong drive for excellence. Such traits were sorely needed in GMC’s early days, when— despite its location in the tiny Swiss hamlet of Appenzell— the company didn’t run with the precision of a Swiss watch.
“In 1994, we had eight or nine employees,” Müller recalled. “We were much more local [in our client base], and we had a large number of dissatisfied customers.”
Although the company only had about 20 customers, three employees worked six days a week—often into the wee hours—to provide support. Müller didn’t relish dealing with angry customers and was dubious the company could be scaled up. “The first major step was telling the people at GMC, when we have more positive calls than negative ones, we’ll know we’ve turned things around,” he recalls.” Now, 18 years later, Müller is proud to share GMC’s “Net Promoter Score,” a customer loyalty metric developed by Fred Reichheld, Bain & Co. and Satmetrix. “Our [Net Promoter] scores are very good, around 35 to 40 points, which is very high on that satisfaction scale,” he said. “That’s a huge achievement.”
Prior to buying GMC, Müller spent a decade as management consultant and turnaround manager with Bain & Co. “When I was first introduced to GMC, it was a turnaround situation, and naturally my experience came into play in reviewing and assessing the potential of the company,” said Müller. “I leveraged this in determining the viability of the company, not as it was currently positioned as a reseller of printers, but in its potential as a software development business.”
Müller, who holds a degree in physics as well as an MBA, credits that unusual combination with shaping his business sensibilities. “My education helped me understand how seemingly disparate areas of the business really are related and have synergy,” he says. “Basically, it’s the ability to take a high-level, conceptual view while being able to drill down from there to the practical, day-to-day operations.”
A VERTICAL APPRO ACH
Going forward, Müller will spend the next year at GMC concentrating on “verticalization.” “Our strength is being service providers, marketing service providers and business process outsourcers,” he explains. “[We’re] going after the banking vertical and the insurance market as well as the utilities and retail sectors— we’re moving from a printcentric to a vertical, multichannel approach.” Müller credits Rich Troksa, formerly of IBM and Exstream and now an independent consultant, as an excellent resource. “He’s a good verticalization coach—he’s done that twice, with IBM when they were selling mainframes and then with Exstream [where he served as president and CEO through the company’s sale to HP].”
Although Müller is only a couple of years shy of retirement age, don’t look for him on the shuffleboard court. He has a long list of projects as well as some charity work in mind. “I’m not going to be idle,” he says. “The only thing I won’t be doing—I will not be allowed to work for or participate in a company that’s a GMC competitor. That’s in my contract. Other than that, I can do anything.”