Why VMware paid $1.5 billion to leap into mobile

AirWatch is the biggest acquisition in VMware's history. Sanjay Poonen, head of VMware's end-user computing business, explains why it's the right buy at the right time

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InfoWorld: What are some of the other opportunities?

Poonen: Another example is mobile content management. It's evolving into a space called enterprise file sync and share, which is where Dropbox and Box play. The product AirWatch has in that area, Secure Content Locker, is really starting to do very well in the market. They have customers in the airline industry and oil and gas industries that are really starting to use this. But they don't want to buy an MDM tool from one vendor, a content management tool from another vendor, a secure email product from a third vendor, and an identity management product from a fourth. We really think the platform approach is going to be the reason we win.

If you go to the Apple website, there's a great story on United Airlines. One of the pilots says: I use this secure content tool to bring up all of my documents for my landing stuff, so I don't have to carry 45-pound bags into the cockpit. And the tool is AirWatch. In many cases, where you have mobile devices and you want to share a document, these should be connected processes. You manage the device, you manage the apps, and you manage the content. A number of other customers like that, too: Walgreens, Renault, BestBuy. Nine of the top 10 U.S. retailers are customers. They've been very successful in oil and gas, and now, I believe, banking and federal will be good verticals that evolve this year.

InfoWorld: What, if any, integrations will there be between AirWatch and VMware View? And how important is desktop virtualization to delivering apps to mobile devices?

Poonen: We can't talk about the specifics of road maps until the AirWatch deal closes. But I'll give you a high-level description of how we think about this. Wherever you're able to have content, it needs to be visible for desktop and mobile. So you need to make sure that happens.

We have a product called Mirage. It's not new, but it's an image management product for Windows. We never had an image management product for Mac, but AirWatch has built some laptop management capabilities for Mac. That's great. Now you have a story that stretches across Windows and Mac. As people virtualize desktops, they may want to have a single sign-on place to access their desktops through View or from their mobile devices through AirWatch. That single sign-on capability will be ours, which was underneath Horizon App Manager. So some of these logical places are pretty easy to think about.

InfoWorld: How do you think this acquisition will affect your brand perception?

Poonen: I use this analogy. In the previous decade, there were two acquisitions that really changed the course of the companies acquiring them: Google acquired YouTube for $1.6 billion, and eBay acquired PayPal for around $1.5 billion. Those two acquisitions, at about the same price as we're paying for AirWatch, were seminal points in the histories of those companies. I'm not saying Google was made just by YouTube. But eBay was transformed by PayPal and certainly YouTube has been a significant part of the Google proposition.

I think AirWatch is one of those moments for VMware, where we get an opportunity to not just be a de facto standard for, let's say, 100 million virtual machines one day. We now get to potentially touch 100 million devices in one day. And we're in the first inning. It's clear that we have 10,000 customers and the most number of devices under management, but ... I think the first company that can manage 100 million devices and also have 100,000 customers, it's going to be game over. And that's our goal.

We have to take the 10,000 customers and get this to as many as 500,000 customers. Every employee carries at least one device. I happen to carry three devices, but I am the crazy mobile guy at VMware. I think it's a great opportunity for us -- and the point is to be able to catch that asset as you acquire it at just the right point. That's what eBay did with PayPal, that's what Google did with YouTube. I sincerely believe we picked up a really good asset at the right time.

This article, "Why VMware paid $1.5 billion to leap into mobile," originally appeared at InfoWorld.com. Read more of Eric Knorr's Modernizing IT blog. And for the latest business technology news, follow InfoWorld on Twitter.

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