VMware's $1.5 billion acquisition of mobile device management vendor AirWatch, revealed Wednesday, is the latest sign that the server virtualization kingpin is willing to spend big in its search for the "Next Big Thing."
According to several VMware partners, the AirWatch deal is also a sign that VMware can no longer wait for Horizon Mobile, its in-house MDM technology, to deliver on its promise of simplifying management of personal and enterprise data stored on devices.
One VMware partner told CRN buying AirWatch is a huge move, not only because its MDM technology is solid but also because VMware's own Horizon Mobile product leaves much to be desired from a feature and functionality standpoint.
"VMware made this deal because it has to be in the MDM space to remain relevant," said the source, who requested anonymity to protect his partnership with VMware.
Citrix is still the dominant player in the end-user computing segment, but buying AirWatch will help VMware close the gap significantly, one partner of both vendors told CRN.
"The bottom line is that VMware recognized an area of the Horizon Suite [of which Horizon Mobile is a part] that needed an overhaul, and recognized that its homegrown approach was lagging a bit," said the source, who asked not to be named.
But while Citrix owns the desktop space the way VMware owns server virtualization, that doesn't necessarily mean either will dominate mobile device management, said another partner that works with both companies.
"The mobile space has nothing to do with the virtualization space," he said. "User behavior is very different, which is one reason why VMware has had such a hard time gaining ground on Citrix on the desktop."
Sanjay Poonen, executive vice president and general manager of VMware's End-User Computing unit, said in an interview that the AirWatch deal and VMware's acquisition of Desktone in October are moves made with an eye to the future.
"We felt we had to move the company from mainframe and client-server to mobility and cloud. The cloud part we got, but in mobile, frankly, I would not say we had a lot of credibility there," Poonen told CRN.
VMware's AirWatch deal is the latest example of an MDM feeding frenzy that includes Citrix's acquisition of Zenprise in 2012, IBM's purchase of Fiberlink and Oracle's Bitzer Mobile buy, both of which happened in November. Other MDM vendors like Good Technology and MobileIron are still out there on the acquisition radar.
That said, VMware will be facing lots of competition in the MDM space. Last June, Gartner pegged the size of the market at $784 million, but said with more than 120 vendors clamoring for a piece of the pie, consolidation is inevitable.
The AirWatch deal is the largest in VMware's 15-year history, but it's very different from its $1.2 billion of Nicira, a software-defined networking startup, in 2012. While that deal was about establishing a foothold in an as-yet undeveloped market, buying AirWatch is, in some ways, a way to correct previous missteps in a market that's peaking.
PUBLISHED JAN. 22, 2014