Orlando Bravo, co-founder and managing partner of Thoma Bravo, reiterated during a conference this week his oft-repeated belief that software is almost inflation-proof.
“You take the current inflationary fears, which have been going on for a while now, and software is a productivity enhancing tool,” he said during an interview with CNBC at the Delivering Alpha conference Wednesday.
“These tools have a lot more value if there’s labor inflation, because they allow you to do more with less labor and there’s certainly a labor shortage right now all over the economy, whether it’s restaurant workers or knowledge workers or what have you, and software’s a great productivity tool to be able to deal with that.”
Bravo was among a line-up of speakers at the event giving their take on the current markets. He talked about software investing and the rise of cybersecurity. He also mentioned SPACs and his view that the structure could use some improvements.
“There could be major improvements in the SPAC market, like, accountability,” he said. “We believe that a SPAC sponsor, together with a company, should put up all their numbers in the past and continue to report every quarter on how they’ve done versus projections and that will improve in that market.”
Thoma Bravo is back in market targeting $22 billion for its fifteenth flagship fund for investments in software and technology-enabled services sectors, Buyouts previously reported. One major area of technology for the firm is cybersecurity, Bravo said.
“We’re seeing huge opportunities in cybersecurity and workflows right now in the software industry are about 50 percent on premises and 50 percent cloud,” he said. “And that is creating a big cybersecurity challenge for companies.”
Bravo added that if you combine all of Bravo’s portfolio companies – it equates to “by far the largest cybersecurity company in the world, with about $5.6 billion in revenue.”
“And that’s a sector that we’ve been so active in since 2009 and our activity has accelerated,” he said. With some experts calling cybersecurity the “new age terrorism” this sector figures to here to stay, especially given how hackers are constantly growing and evolving.
While Bravo is not concerned with inflation, or even with supply-chain issues, he does spend a lot of time thinking about labor issues.
“Labor is a big issue [as it relates to] retaining knowledge workers, motivating knowledge workers, hiring people, building culture is even more challenging today than it’s ever been,” he said. “And it’s a board discussion in every company and we have our ways of dealing with it.”
Part of motivating workers is to help them understanding they are contributing more than just their labor, he said. “We want to make young people know that they are doing more than just their job, there is something bigger at the heart of it and we are all doing our part for the greater good,” he said.