VMware's virtual machine technology is becoming an integral feature of data centers and private clouds. It reduces IT's reliance on the limitations of proprietary hardware and software, allowing more efficient use of existing hardware and introducing savings in space, energy and additional servers. Fourth quarter revenue for 2013 is expected to be just shy of $1.5 billion, up 15%. The acquisition will be funded by $1 billion loan from parent company EMC.
AirWatch is a major player in the enterprise secure mobility market, with email, application, content, laptop and browser management offerings. It is used by more than 10,000 organizations in 150 different countries. It employs 1,600 people in nine offices around the world, and is expected to generate sales of around $75 million in 2014. “When we started AirWatch, we set out to help businesses succeed in the mobile explosion that was set to come. Now there are more than 2 billion smart phones and tablets in the world and more than half of those devices touch an enterprise,” said Alan Dabbiere, co-founder and chairman, AirWatch.
"The acquisition of AirWatch," enthuses Sanjay Poonen, executive vice president and general manager of end-user computing at VMware, "extends VMware’s proposition from data-center to device, and strongly positions us for the Mobile-Cloud era. After the closing of the acquisition, the combination of AirWatch and VMware will make us an instant leader in enterprise mobile management and security, one of the fastest growing and most strategic markets to businesses today."
He points to the obvious synergy between VMware's cloud operations, and AirWatch's mobile device management. AirWatch offers, he continues, "everything from Mobile Device Management, Mobile Application Management, a full containerization solution for toggling between individual and corporate data, secure e-mail, productivity apps and web browsing, as well as a Mobile Content Management solution for Enterprise File Sync and Share." It is, he says, an "opportunity where the disciplines of Management, Security and Virtualization come together in the context of enterprise mobility."
This is the second billion-dollar acquisition by VMware in 18 months. In 2012 it bought Nicira, a firm that expands the virtual machine into the virtual (software defined) network.
Last summer VMware was also one of the investors that pumped $18.5 million into HyTrust, a cloud security firm. “The purchase of AirWatch is a great move for VMware,” commented Eric Chiu, president and co-founder of HyTrust yesterday. “Similar to VMware's investment in HyTrust last year, this signals VMware's continued focus on security. Much like how HyTrust enables greater cloud adoption, AirWatch enables broader mobile computing – this is especially important given that security is top-of-mind for every CIO following the Target, Adobe and Snowden breaches.”
The move is also being welcomed by the markets. Bloomberg notes, "VMware rose 1.2 percent to $98.51 at the close in New York. The stock fell 4.7 percent last year, when the Russell 1000 Index gained 30 percent."