VMware to Buy AirWatch for $1.54B
VMware is snapping up the ever-growing customer base of AirWatch for over $1.5 billion, pulling in the private firm's mobile management smarts Wednesday.
Light Reading highlighted Atlanta-based AirWatch LLC as the top funded startup of 2013. The company received $225 million last year, bought Motorola's services unit, and grew its employee and customer base fast over the last 12 months. (See The Best-Funded Mobile Startups of 2013 and Mobile Grabs $813.6M in February Funding.)
AirWatch now boasts 1,600 employees and 10,000 enterprise customers. In the summer of 2013, it claimed 7,000 mobile enterprise customers.
"AirWatch's fast growth and large customer base will have proved highly attractive to VMware Inc. (NYSE: VMW), which can now also add an important array of features to its End User Computing unit, writes Ovum Ltd. analyst Richard Abslaom in an email on the buyout. "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 pay $1.18 billion in cash and $365 million in installment payments and assumed unvested equity for AirWatch, the company said in a statement.
"The world needs a robust enterprise mobility platform for the post-PC world of heterogeneous devices -- be it iOS, Android, or Windows -- and now that is VMware!," the company's Sanjay Poonen writes in a blog post today.
Ovum's Abslaom expects that the buyout could spark a wave of acquisitions in the mobile management space. "We expect the VMware-AirWatch deal to kickstart 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," he writes, expecting IBM Corp. (NYSE: IBM), Symantec Corp. (Nasdaq: SYMC), and others to eye remaining independent vendors such as Good Technology Inc. and SOTI.
Certainly the mobile management space continues to grow and change with the bring-your-own-device (BYOD) trend and WiFi and cellular coverage becoming prevalent issues in the workplace. (See Mobile Security in a BYOD World and SpiderCloud Eyes LTE Enterprise Small Cells in 2014.)
— Dan Jones, Mobile Editor, Light Reading