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VMware acquires AirWatch. Here's our first impression.

This morning VMware announced that it will acquire enterprise mobility management vendor AirWatch.

Jack Madden
Executive Editor

This morning VMware announced that it will acquire enterprise mobility management vendor AirWatch. (Press release here.) In a single move, this answers any remaining questions about VMware's commitment to end user computing, and the importance of enterprise mobility management.

Here at BrianMadden.com, we've had a long history of wondering what VMware was up to in the mobile space. Most recently, AppDetective blogged that VMware had no choice but to make a mobile acquisition soon. To follow that up, I outlined the current state of VMware's enterprise mobility management offerings.

As our coverage of enterprise mobility management has expanded over the last 2 1/2 years, we've maintained that as end user computing evolves, EMM will be an increasing important component.

VMware will pay approximately $1.54 billion for AirWatch. This shows that not only do they want to get into EMM in a big way, it's more than just a side bet. There many smaller companies they could have bought for less money, but instead, they're going in big.

It's also interesting that now people will be comparing VMware to Citrix in the mobility space, just like we've been comparing their desktop virtualization solutions for years. 

We're getting on the phone with VMware later today, so stay tuned to BrianMadden.com over the coming days and weeks for more in-depth analysis.

Finally, if you need to get up to speed on EMM, mobile device management, mobile app management, and how these technologies actually work, I humbly suggest you head over to Amazon for a copy of my book "Enterprise Mobility Management: Everything you need to know about MDM, MAM, and BYOD."

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Wow, the fact that this purchase price is so high is huge. The $1.54B total price includes $1.175B in cash. VMware literally wired Airwatch over a billion dollars. You're right that that shows that VMware believes this space is legit and they're not just working some huge deal amount for the press release. (That's what Citrix did when they bought XenSource. The press release said the deal was valued at $500M, so the industry latched onto that number, but really it was only like $10M in cash with the rest future payments based on certain milestones, etc.)


But this deal being over a billion worth of cash, man, this is really something.


I totally agree too that this helps to validate both the industry at large, and our decision for both BrianMadden.com and BriForum to include EMM coverage. Trust me.. EMM is a part of EUC, whether people want to believe it or not.


And, yeah, funny as you say now how Citrix and VMware are two of the Top 3 companies in the EMM space. The more things change, the more they stay the same. :)


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And then there were two .....  :-)   Good Tech and MobileIron. Now with Airwatch (VMware), Fiberlink (IBM), ZenMobile (Citrix), Bitzer (Oracle).


Now, which company has the better mobile application development platform.... as VDI a bridging technology IMHO.


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The purpose of this overpaid acquisition was multifold “starting” with MDM and moving into comprehensive device and server management. The bonus comes when VMware has the opportunity to displace Citrix at many of Air-Watch’s largest accounts. It’s so silly that I love this strategy.


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/joke on


when you look at the price for the AirWatch licence, you ask yourself how they will get their return on investment ;-)


/joke off


nice move... Now, how will the integration go (like with ThinApp, Mirage, Horizon...)


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@Jack, what do you think happens to MobileIron and Good? Can they stick it out on their own? Esp. if all the other big companies will be pushing their own solutions?


I was looking on Wikipedia at the biggest IT and software companies for ones that I know don't have an EMM solution. I think it's just Microsoft, HP, and CA? I dunno.. would any of them buy those companies? Or is there someone else out there who, like VMware, is weak in the space and has a billion extra dollars?


(Funny btw that we assume one of these other companies would also have to sell for $1B+. Maybe VMware just paid that because they had the cash and knew no one else could afford it, so why not make a splash while ensuring that their competition couldn't do the same thing?)


Also, what do you think happens to VMware's pre-acquisition mobile team? "Congratulations on showing us that mobile was important. Too bad your products weren't good enough. Thank you for your service. Here's the number to enroll in COBRA."


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@Brian What about Microsoft mix of Intune, SCCM, Win Srv 2012 R2 features as EMM


robtiffany.com/microsoft-emm


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@Brian,


That’s interesting, because so far nobody’s talked much about Horizon Mobile Android devices. AirWatch supports Knox, a competitor to the Horizon Android mobile hypervisor. Though maybe it’s a moot point since Knox is having trouble taking off, and I haven’t run into any Horizon Mobile virtualized Android users in the wild.


But like you mention, there are the various other Horizon Workspace apps, most of which could get replaced by AirWatch apps; and then there’s also Horizon Data versus AirWatch secure content locker, etc. There’s a lot to do, and some of that stuff will have to go eventually.


And if you think back all those workspace aggregation powerpoints we’ve been seeing for a few years, in theory VMware’s vision is that View, Mirage, MDM, MAM, file syncing, laptop management, and all the rest of that will eventually get all pulled together. Kit Colbert pretty much confirmed that’s the vision on a call yesterday, and you can see that from Sanjay Poonen’s YouTube video (definitly worth watching if you haven’t yet www.youtube.com/watch ). But man, bringing all of this together? We’re going to be writing articles about this process for years. (Plus I’m sure that means plenty of work to do for the people that were working on Horizon Mobile already.)


Now regarding other M&A activity, Microsoft would obviously have to get more comfortable providing real support to iOS and Android. CA and HP were getting mentioned a lot yesterday, along with Oracle. Even though Oracle just bought Bitzer, Bitzer was pretty small and not as broad, so Oracle could go for a second round of EMM.


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@arek, I've been working on putting together a detailed list of the specifics, but even mixing together all those MS options there are still a lot of gaps and caveats when compared to typical EMM vendors—Android support is only through EAS, so definitely no OEM MDM API support, no advanced MAM capabilities/email clients (unless you count Office 365), work folders doesn’t have access for iOS/Android, (Skydrive could be your file sync, but then there are still a lot of caveats compared to other file sync products). They’re making progress, but still a loooong way to go.


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@ Brian


"(Funny btw that we assume one of these other companies would also have to sell for $1B+. Maybe VMware just paid that because they had the cash and knew no one else could afford it, so why not make a splash while ensuring that their competition couldn't do the same thing?)'


A non defensive, defensive acquisition... Or would that be a first strike defensive acquisition then?  Not sure that is in the thought process. Individuals (read idiots with too much money) spend lavishly to show off money, companies dont. You see value for the dollars or not, Not giving extra money to drive up the cost of competitors to the company you are buying. I dont think that plays. Not when talking this kind of money.


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I think the purchase price is a statement of how important AirWatch is to the future of VMware and their ability to remain competitive. AirWatch are very successful and making money and VMware can immediately benefit from that. They obviously needed to make sure the acquisition would be successful and that no one else got in first.


@appdetective "very bullish CEO who has enough money to not give a crap about selling early" Well as they say... everybody has a price!


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Sanjay Poonen, GM of End-User Computing at VMware tweeted this:


@google acquired @YouTube ($1.6B) 2006,  @eBay acquired @PayPal ($1.5B) 2002. @AirWatch acquisition's a "YouTube/PayPal MOMENT" for @VMware!


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@Jack "And if you think back all those workspace aggregation powerpoints we’ve been seeing for a few years, in theory VMware’s vision is that View, Mirage, MDM, MAM, file syncing, laptop management, and all the rest of that will eventually get all pulled together... But man, bringing all of this together? We’re going to be writing articles about this process for years. (Plus I’m sure that means plenty of work to do for the people that were working on Horizon Mobile already.)"


I completely agree: Integrating that many products is a tough task. Its made tougher because the vendor have to show "intermediate" steps. Customers hate it because it feels kludgy and they know its short term. But the analysts and press won't let you work in quiet for the 24 months it will take to get it right! Somehow Apple is the only company that has been able to go into a black hole and come back with a killer product every 4 years.


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This is worth checking out - AirWatch may have HAD to sell: blogs.forrester.com/.../14-01-28-was_airwatch_running_out_of_runway


They were basically giving their product away - even at scale, it's hard to amass a lot of revenue that way.


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