VMware acquires AirWatch to boost mobile device, application management

The company accelerates its client computing push with the addition of AirWatch's tools

VMware has reached a deal to acquire mobile management specialist AirWatch for US$1.54 billion, as it aims let users manage desktops, mobile devices and applications using its products.

The acquisition of AirWatch extends VMware's product portfolio from data center to end-user devices, and strongly positions the company for an era where all devices run hosted applications, Sanjay Poonen, executive vice president and general manager at VMware's End-User Computing unit, wrote in a blog post on Wednesday.

VMware will acquire AirWatch for approximately $1.175 billion in cash and $365 million of installment payments and assumed unvested equity, it said.

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VMware may be best known for its server virtualization products, but the company has recently increased its focus on client computing, as well. The end of the PC era and the arrival of new devices in the enterprise via BYOD programs have opened up new opportunities for vendors to make their mark. The acquisition of AirWatch is just the latest step for VMware. In October, it also acquired desktop-as-a service company Desktone.

VMware's vision for the space -- and one it shares with other vendors -- is to create a secure virtual workspace that allows end users to access applications from desktops, laptops, smartphones and tablets regardless of the time and place.

There is very little product overlap between the two companies, according to Poonen. The acquisition of AirWatch adds management of mobile devices and applications, and the ability to separate individual and corporate data and applications on smartphones and tablets, Poonen said.

AirWatch will become the focal point for all of VMware's mobile development activities going forward, according to Poonen. He didn't offer many details of how products will be integrated, but said that VMware's expansion within the mobile space has been a top priority since he started at VMware last August.

VMware isn't the only company that has started the year by acquiring a company to improve its client computing offerings. Earlier this month, VMware competitor Citrix Systems acquired Framehawk for an undisclosed sum, and will use the company's technology to improve the performance of virtual desktops and applications over wireless networks.

In acquiring AirWatch, VMware plans to offer customers a single suite of software that can provide a range of virtual desktop capabilities that can be accessed from both desktop computers and mobile devices.

"We think the market will move away from fragmented point players. Today you may have a Citrix for a desktop, a MobileIron for mobile, a Jive for social computing, a Ping for identity, maybe a DropBox for file sharing. We think it will move away from fragmented solutions to a unified solution," Poonen added.

The idea of offering a unified virtual desktop suite is an increasingly popular one for the enterprise software vendors.

"The market is quickly developing. What customers really want is one platform, from the data center to the mobile layer," said AirWatch CEO John Marshall, in an interview with IDG News Service.

A number of AirWatch's competitors have been purchased by larger enterprise software companies of late: In November, IBM acquired Fiberlink and Oracle acquired Bitzer. Other independent MDM companies, such as MobileIron and Good Technology, will face increased pressure to partner or be acquired by larger enterprise software companies, noted Jack Gold of IT analyst firm J.Gold Associates, in an advisory email.

"This acquisition is a direct shot across the bow aimed at SAP, IBM, Citrix, Oracle and others that VMware see as a threat to their mobile cloud and virtualization ambitions," Gold wrote.

VMware's Horizon suite offers organizations the ability to have their users run a copy of their applications or other services from any computer.

The Horizon Mobile component extended Horizon's virtual desktops to portable devices such as Android and the Apple iOS devices. AirWatch's product offers richer capabilities in mobile device connectivity though.

"AirWatch has much greater MDM capabilities to manage devices," Gold noted in a follow-up email. For instance, the platform features additional security controls. Last year, with $200 million in outside investment, AirWatch acquired Motorola's Mobility Services Platform last year to boost its portfolio of technologies. In addition, It supports Windows Phone devices, which VMware Horizon does not support.

The AirWatch platform also appears to have a much larger customer base than the Horizon mobile products. A privately owned company based in Atlanta with 1,600 employees, AirWatch has attracted 10,000 enterprise customers worldwide since it was founded in 2003.

The AirWatch platform allows an end user to receive work email, set up a VPN (virtual private network) to access organizational files, and run enterprise applications, all with proper security measures in place. It provides the administrator with the ability to limit what resources a user can access on the corporate network. It can offer reports on which devices are not compliant with security rules, and send alerts to devices. It provides the ability to erase all corporate data should the device get lost or stolen and can track the device's location.

AirWatch's software works with Android, Apple iOS and Macintosh, Microsoft Windows desktop and mobile phone devices, and BlackBerry and Symbian devices.

When the acquisition is completed, AirWatch will operate in as a stand-alone business unit, and its products will continue to be offered under the AirWatch title.

"AirWatch will be our focal point of all our efforts in the mobile space," Poonen said.

Copyright © 2014 IDG Communications, Inc.

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