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Ovum gives VMware’s buyout of AirWatch the thumbs up


January 23, 2014  


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VMware’s US$1.5 billion purchase of AirWatch announced yesterday will give it a “tried and tested alternative features in mobile device management (MDM), mobile app management (MAM) and mobile content management (MCM),” said Richard Absalom, an analyst with Ovum.

 “Privately owned AirWatch has been one of the clear leaders in the enterprise mobility management market, exhibiting phenomenal growth over the last few years,” he added. “It now boasts 1,600 employees and 10,000 enterprise customers globally. Having received US$200million in investment in early 2013 and using it to acquire Motorola’s mobility services unit, as well as pushing aggressive organic growth, the exit price will no doubt be pleasing to AirWatch’s founders and investors.”

Absalom described it an important piece of the puzzle for VMware.

“AirWatch’s fast growth and large customer base will have proved highly attractive to VMware, which can now also add an important array of features to its End User Computing unit,” he said. “Where VMware has specialized in mobile virtualization to manage enterprise mobile estates, AirWatch will give it tried and tested alternative features in mobile device management (MDM), mobile app management (MAM) and mobile content management (MCM).”

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

“When we started AirWatch, we set out to help businesses succeed in the mobile explosion that was set to come,” said Alan Dabbiere, co-founder and chairman of AirWatch. “Now there are more than 2 billion smart phones and tablets in the world and more than half of those devices touch an enterprise.”

Absalom also predicted the sale could also kick-start acquisition activity from the remaining mega-vendors not already heavily present in the space.

“As Ovum has been talking about for the last two years, this market is fast consolidating and only a few independent leaders now remain: Good Technology, MobileIron, SOTI, plus the likes of Apperian in the MAM space. These vendors are now going to face stiff competition from mega vendors such as IBM, SAP, Dell and CA, as well as VMware, Citrix, and security vendors such as Symantec and McAfee.

“And with several other big names yet to make major moves (HP, Microsoft for example and maybe even Oracle, which has made a relatively small acquisition in Bitzer Mobile), those remaining independent leaders look like ripe targets. “We expect the VMware-AirWatch deal to kick-start a surge in M&A activity in the space over the next 6-12 months as the remaining mega-vendors buy their way into this fast growing market.”

AirWatch’s headquarters in Atlanta is expected to expand and be the centre of VMware’s mobile operations.

Further information on the sale is available at www.vmware.com/ca.


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