VMware snaps up AirWatch in $1.54bn deal, aims to be “leader in EMM”

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Cloud giant VMware has announced its intention to buy enterprise mobility management (EMM) provider AirWatch in a deal which will total $1.54bn (£929.7m).

VMware says the deal will comprise $1.175bn in cash upfront and a further $365m in instalments.

“Mobile device management has been explosive,” noted Pat Gelsinger, VMware CEO in an analyst call. “Against that backdrop, the strategies of our two companies are tightly aligned.

“Mobile is now global, and the mobile industry is changing rapidly,” he added. “VMware and AirWatch feel uniquely qualified to deliver what today’s enterprises demand.”

Alan Dabbiere, chairman of AirWatch, spoke of VMware as a “proven innovator” and added there was a great opportunity to bring his company’s solutions to a wider audience.

“In short, there’s no better place or any better partner for AirWatch to join forces with than VMware,” he said.

Sanjay Poonen, VMware GM of end user computing, told analysts this play would aim to make VMware the leader in EMM and security, adding AirWatch has “an impressive track record of innovation [and] an enviable base of 10,000 worldwide, which we believe is far ahead of the competition.

“Mobile is the new desktop – and from the top floor to the shop floor, our daily lives have been transformed by mobile computing,” he said.

Dabbiere will form a new operations team which will report directly to Gelsinger, while AirWatch's 1600 employees will still report to CEO John Marshall.

This news has come as both a surprise and an expectation to those following enterprise mobility.

The rumour mill had long since mooted that VMware was in the market for an EMM provider – but the fact the cloud giant had its eyes on AirWatch all along has come completely out of the blue for industry insiders.

Mobility expert Brian Katz, writing on his personal blog, described the situation as a ‘win-win’ for both parties – and bad news for the competition.

“VMware now owns the entire stack from (virtual) server straight through to desktop and mobile, essentially from the data centre to the endpoint,” he wrote, adding: “This is huge for them and allows them to continue on the enterprise money train.

“VMware now has a cogent mobile story to walk into its many clients, and AirWatch gets even more access to people who can make decisions and are already partnered with VMware.”

Even though the year is but a few weeks old, this is the biggest story in the enterprise so far, and expect a lot of the other big EMM players to become acquisition targets themselves.

And aside from getting access to its 10,000 strong clientele, Gelsinger also noted a desire for his company to move into the Atlanta area, where AirWatch is based.

He told analysts: “I have no doubt that AirWatch will bring their invaluable industry expertise to VMware, and it’s clear that our two organisations share the key commitment to breakthrough innovation.”

What’s your view on the deal? Which other candidates will be on the list?


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