VMware Goes Mobile With AirWatch Buy

VMware accelerates expansion outside the datacenter in a $1.54 billion deal that will broaden the company's End-User Computing portfolio.
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Virtualization and cloud infrastructure vendor VMware on Wednesday announced an agreement to buy mobile device management and mobile security vendor AirWatch for $1.54 billion.

AirWatch will bolster VMware's End-User Computing (EUC) group, which was formed in 2010 with the Horizon desktop management product line. Last October, VMware acquired Desktone, which provides a desktop-as-a-service virtualization platform for delivering Windows desktops and applications as a cloud service. With the AirWatch deal, VMware extends its management grasp to mobile devices.

"VMware’s vision for end-user computing has been to create a secure virtual workspace that allows end-users to… move from desktop, to laptop, to tablet, to phone, to car," stated Sanjay Poonen, executive VP  and general manager of the EUC group. Poonen previously headed up mobile strategy at SAP, and was named head of the EUC group last August.

[Want more on this vendor? Read VMware Datacenter Growth Far From Over.]

VMWare is planning to give AirWatch a high degree of independence. Once the deal is completed, which is expected to happen in the first quarter, employees will continue to report to AirWatch founder and CEO John Marshall, who will, in turn, report to Poonen. AirWatch's co-founder and chairman, Alan Dabbiere, will oversee a new operating board that will report to VMWare CEO Pat Gelsinger.

"By joining a proven innovator like VMware, we now have an opportunity to bring our leading-edge solutions to an even broader set of customers and partners to help them optimize for the mobile-cloud world," said Dabbiere in a statement.

Headquartered in Atlanta, Ga., AirWatch provides mobile device management, mobile application management, and mobile content management software to more than 10,000 customers globally. Competitors range from MobileIron and Apperian to BoxTone, SAP Afaria, and the IBM MobileFirst Platform.

"We have been predicting for some time the demise of the stand-alone mobile device management market as mobile has matured and is mainstream at nearly every enterprise," wrote Jack Gold, principal analyst, J.Gold Associates, in an emailed research note on the deal.  "Recent acquisitions -- IBM/Fibrelink, SAP/Sybase, Citrix/Zenprise, Oracle/Bitzer -- have taken place and we don’t think market consolidation is done yet."

Of the more than 2 billion smartphones and tablets now in use, more than half touch corporate datacenters, according to AirWatch.

Doug Henschen is executive editor of InformationWeek, where he covers the intersection of enterprise applications with information management, business intelligence, big data, and analytics. He previously served as editor-in-chief of Intelligent Enterprise, editor-in-chief of Transform magazine, and executive editor at DM News.

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