It’s still early but 2014 is shaping up to be highlighted by M&A activity. The VMware/AirWatch marriage is the latest example.
So why was VMware willing to spend $1.5+ billion for an MDM leader? The easy answer is that the world is going mobile – new application development is focused on mobile or web applications alone while PCs are moving closer to mainframe status. AirWatch immediately bolsters VMware’s play for endpoint computing as well with mobile complementing virtual desktop technology.
Aside from the strategic implications however, AirWatch places VMware into a lucrative market with plenty of vendor churn and immediate opportunity. According to soon-to-be-published ESG research:
- 48% of enterprise organizations have deployed MDM technology while 31% are in the process of deploying MDM technology and 11% are interested in doing so. This means that more than half the enterprise market is still in play to some extent so lots of instant opportunities for VMware sales.
- Of those organizations that have deployed MDM, only 43% have standardized on a single MDM vendor across the enterprise. This means that there will still be plenty of market churn as organizations replace tactical MDM with enterprise-class suites.
- 23% of IT/security professionals working at enterprise organizations (i.e., more than 1,000 employees) believe that MDM is a commodity technology today with little differentiation between products while another 41% believe that MDM is not a commodity today but will be a commodity technology within the next few years. Good news for VMware as it can integrate AirWatch technology into broader initiatives around endpoint computing and thus differentiate itself from the me-too MDM status quo.
Yes, VMware is venturing into new turf where its server virtualization hegemony really doesn’t matter to the mobile crowd. What’s more, its endpoint computing successes have been marginal at best. That said, this is a bold and shrewd move for VMware.
Market leaders like Good and MobileIron will stick around while IBM/Fiberlink and Citrix/Zenprise are already pursuing the bigger integration play. Nevertheless, there is plenty of market upside and integration opportunity for VMware and AirWatch. If it can keep AirWatch focused on mobile market developments and execute on an integration strategy, VMware could really have an impact on an IT environment dominated by cloud and mobile.