Mobile Management Consolidation Continues And VMware Accelerates Mobile Efforts
On January 22nd, 2014, VMware (NYSE: VMW) announced the intent to acquire Atlanta, GA based Airwatch for $1.54B. More than just an acquisition of a leading enterprise mobile management (EMM) vendor, the acquisition represents a cornerstone for VMware's mobile strategy for end user computing. Should the deal close, co-founder Alan Dabbiere will report to VMware CEO Pat Gelsinger. AirWatch will continue to be led by CEO John Marshall and included in VMware's end-user computing group, led by General Manager, Sanjay Poonen. Upon completion of the acquisition, the market impact is significant because:
- AirWatch users breath a sigh of relief amidst rapid market consolidation and uncertainty. AirWatch is a leading enterprise mobile management (EMM) vendor with over 10,000 customers and 1600 employees. The company has received $200M+ in Series A funding, delivered a global presence with 10 global offices and 16 languages, and achieved over a 90% customer retention rate. AirWatch brings a rich ecosystem of device manufacturers, feature set partners, resellers, mobile operators, and managed services providers. Despite these successes, the EMM space faces rapid consolidation and AirWatch is a constant candidate for acquisition.
Point of View (POV): Citrix’s acquisition of Zenprise foreshadowed the EMM market consolidation and the acquisition of MaaS360 (Fiberlink) by IBM in November 2013 created some concern for existing customers and prospects about AirWatch's long term fate. In addition, a price war in 2013 stalled a planned IPO process for AirWatch. Many customers and prospects feared that AirWatch would remain the last EMM vendor standing. Given the proposed management structure and VMware's history of mergers and acquisition, AirWatch users should feel confident that the technology and team are in good hands and that VMware intends to invest and grow the business.
- VMware gains a mobility foundation and moves from feature set to end point management. AirWatch's EMM offerings cover a broad set of device and enterprise features. Device features include MDM, MAM, MCM, MEM, SSO, OS Container, Enterprise Workspaces, App Wrapping/SDK, API Framework, and Device usage. Enterprise features include API, PKI, DLP, NAC, Directory Services, Content Repositories, Event Management, SIEM, Business Workflow and Systems Management. Other key areas include Platform Integration, Process Automation, Workflow Templates, and a Privacy Framework.
(POV): VMware signals a commitment to mobility and goes head to head with Citrix. The move raises VMware's total addressable market. After some attempted efforts in mobility at VMware, an acquisition was required to accelerate entry in the market. MobileIron, a key partner, was most likely a consideration. However, the price tag could have been 4 to 5X the cost of AirWatch for similar capabilities. In fact, AirWatch provides not only the technology and feature set, but also the human capital and know-how to take VMware's business into the mobile world. In the long run, the acquisition of AirWatch's mobile offering will provide a key piece of end point management that moves beyond the bring your own device trend and into the wearable computing age, sensor analytic ecosystems, and the internet of things (IOT).
Recommendations.
As the acquisition has not closed yet, AirWatch prospects and users should reach out to their sales reps and:
- Lock in existing discounts and agreements prior to the VMware acquisition.
- Seek product road map clarifications and commitments where possible.
- Explore the VMware roadmap to anticipate future synergies
The Bottom Line: Mobile Management Is The Gateway Technology To Internet Of Things and Machine To Machine For The Future Of VMware
While acquisitions today address critical consumerization of technology (CoIT) and bring your own device (BYOD) needs, the core concepts behind enterprise mobile management have many key components required to build sensor analytic ecosystems. How you manage a mobile device from security, identity, content, and monitoring has many features required for end point management. Acquisition by larger players bodes well for bringing key innovations to not only end user computing, but also a growing world of machine to machine interactions. Coupled with a deep analytics capability, buyers can expect new business models to be created in this chapter of digital business disruption in the decade to come.
Your POV.
Are you looking at a mobile strategy? Do you see the link between mobility and digital business? Do you see VMware succeeding in this shift to mobility? Add your comments to the blog or reach me via email: R (at) ConstellationR (dot) com or R (at) SoftwareInsider (dot) com.
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