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by Philip Carnelley, Research Director, European Software Group at IDC
Top Line: VMware muscles into the mobile enterprise management space, likely accelerating the consolidation of this sector
VMware has announced that it will buy mobile enterprise device management (MEM) vendor AirWatch for around $1.5 billion. IDC research indicates that privately held (and VC-backed) AirWatch is the second largest supplier in this sector, with over 10,000 customers and 1,600 employees.
VMware is extending its reach into mobile, having already set out on a path to managing desktops and networks from its stronghold of server virtualization, where it is the largest player. VMware's move could be seen as a direct response to Citrix's acquisition of Zenprise, but more important is that it indicates accelerating consolidation in this very fragmented sector. There are well over a hundred pure-play MEM vendors, mostly small and VC-backed, and IDC has already observed these building out their capabilities, for example moving from pure MDM (mobile device management) into mobile security, mobile content and mobile applications management.
Bottom Line for ICT Buyers:
1. For AirWatch customers this looks like good news. MEM is a fast evolving technology area, and to remain strong will take deep pockets and scale. In part this is for R&D; IDC research shows that buyers are looking for holistic solutions. But also, in Europe and elsewhere, MDM solutions are largely sold through partners. AirWatch has had a largely direct sales model, but VMware will allow AirWatch to use VMware's partner channel to build its business. This will make its offerings more easily accessible to a wider set of buyers.
2. Expect to see further expansion of vendor capabilities - and vendor arguments over who has the broadest capability. AirWatch will form part of Sanjay Poonen's end-user computing group at VMware, and one of the most interesting facets of this purchase is VMware's view that MEM should be linked to desktop systems management. We believe that buyers can expect to see VMware making further moves (internally or through acquisitions) in the mobile space. In particular, VMware's Pivotal initiative in mobile application development software will surely be extending its portfolio and thus attractiveness to solution buyers. Poonen's former employer, SAP, where he was President of Mobile Solutions, has one of the broadest mobile software portfolios on the market.
3. Overall, consolidation is beneficial for end users. Despite theoretically reducing choice, it makes buying MEM solutions more attractive and less risky. We do not expect to see acquisitions among MEM companies reducing competition; rather we see further takeovers by larger companies eager to move into a rapidly growing and important enterprise software market. Buyers can benefit from their supplier being part of a larger, potentially more stable and deep-pocketed organization with the R&D dollars to keep up in this rapidly evolving technological market. But just be aware that smaller suppliers may well become part of a larger organization in the not-too-distant future, causing disruption to customers through staff and strategy change.
by Philip Carnelley, Research Director, European Software Group at IDC
Top Line: VMware muscles into the mobile enterprise management space, likely accelerating the consolidation of this sector
VMware has announced that it will buy mobile enterprise device management (MEM) vendor AirWatch for around $1.5 billion. IDC research indicates that privately held (and VC-backed) AirWatch is the second largest supplier in this sector, with over 10,000 customers and 1,600 employees.
VMware is extending its reach into mobile, having already set out on a path to managing desktops and networks from its stronghold of server virtualization, where it is the largest player. VMware's move could be seen as a direct response to Citrix's acquisition of Zenprise, but more important is that it indicates accelerating consolidation in this very fragmented sector. There are well over a hundred pure-play MEM vendors, mostly small and VC-backed, and IDC has already observed these building out their capabilities, for example moving from pure MDM (mobile device management) into mobile security, mobile content and mobile applications management.
Bottom Line for ICT Buyers:
1. For AirWatch customers this looks like good news. MEM is a fast evolving technology area, and to remain strong will take deep pockets and scale. In part this is for R&D; IDC research shows that buyers are looking for holistic solutions. But also, in Europe and elsewhere, MDM solutions are largely sold through partners. AirWatch has had a largely direct sales model, but VMware will allow AirWatch to use VMware's partner channel to build its business. This will make its offerings more easily accessible to a wider set of buyers.
2. Expect to see further expansion of vendor capabilities - and vendor arguments over who has the broadest capability. AirWatch will form part of Sanjay Poonen's end-user computing group at VMware, and one of the most interesting facets of this purchase is VMware's view that MEM should be linked to desktop systems management. We believe that buyers can expect to see VMware making further moves (internally or through acquisitions) in the mobile space. In particular, VMware's Pivotal initiative in mobile application development software will surely be extending its portfolio and thus attractiveness to solution buyers. Poonen's former employer, SAP, where he was President of Mobile Solutions, has one of the broadest mobile software portfolios on the market.
3. Overall, consolidation is beneficial for end users. Despite theoretically reducing choice, it makes buying MEM solutions more attractive and less risky. We do not expect to see acquisitions among MEM companies reducing competition; rather we see further takeovers by larger companies eager to move into a rapidly growing and important enterprise software market. Buyers can benefit from their supplier being part of a larger, potentially more stable and deep-pocketed organization with the R&D dollars to keep up in this rapidly evolving technological market. But just be aware that smaller suppliers may well become part of a larger organization in the not-too-distant future, causing disruption to customers through staff and strategy change.
