VMware, Inc. (NYSE:VMW) is set to buy mobile security company AirWatch to bolster its move to realize its vision of using software to manage the surge of mobile devices in the workplace.
The proposed acquisition would help VMware, Inc. (NYSE:VMW) provide a holistic solution to manage users, devices and applications across desktop and mobile environments.
MDM – A hot sector
Larry Dingan of ZDNet believes mobile device management has been a hot sector desperately in need of consolidation given there are over 100 vendors. Increasing preference has been shown by large enterprises to combine mobile device management with content management and collaboration.
The following is Gartner’s Magic Quadrant on the MDM sector:
The proposed acquisition would offer VMware, Inc. (NYSE:VMW) a foothold in mobility as well as its end-user computing strategy, which revolves around desktop virtualization and delivering enterprise apps to tablets and smartphones.
AirWatch’s presence in 150 countries
As reported earlier, Atlanta-based AirWatch LLC raised $200 million, taking the company to a value of over $1 billion.
AirWatch has over 10,000 customers in 150 countries, including nine of the top 10 U.S. retailers. Its rivals include Cytrix, MobileIron and FrontRange. The company was founded in 2003 and will become a unit of VMware, Inc. (NYSE:VMW) but its 1,600 employees will continue to report to AirWatch founder and chief executive John Marshall.
VMware, Inc. (NYSE:VMW) sells virtualization software, which enables the creation of a virtual machine that acts like a real computer with an operating system. This helps companies use server and storage space more efficiently and reduce IT costs.
VMWare looks for growth
VMware, Inc. (NYSE:VMW)’s main business vSphere, has gotten weaker in recent years as enterprise spending on information technology has dried up. Desktop virtualization products, like vSphere, have become a central part of enterprise computer operations. That means that although fees from licensing are high, the company’s growth prospects in the market aren’t good. Hence VMWare, Inc. has been left to look elsewhere for growth.
As part of its acquisition of AirWatch, VMware, Inc. (NYSE:VMW) will pay $1.175 billion in cash and $365 million of installment payments and assumed unvested equity for closely held AirWatch. According to a statement from the company, the transaction is expected to be completed late in the first quarter.