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

The big news last week was EMC VMware's announcement that it intended to acquire mobile device management firm AirWatch for $1.5 billion. Up until now, VMware's forays into end-user computing have been virtualization-centric, as in the company's Horizon Suite. AirWatch will take VMware a big step closer to end users.

The acquisition comes at a critical time for the company. Although still the leader in virtualization, VMware is under increasing pressure from Microsoft and open source competitors. The AirWatch purchase opens a new array of opportunities.

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Sanjay Poonen is the general manager of VMware's end-user computing business. Formerly head of SAP's mobility division, Poonen was heavily involved in the AirWatch deal, an acquisition he believes will "change the course" of VMware. Several days ago, InfoWorld executive editors Galen Gruman and Doug Dineley and I spoke with Poonen about the AirWatch deal and its implications. The following is an edited version of that interview.

InfoWorld: Why is AirWatch worth $1.5 billion? That's more than VMware paid for Nicira.

Poonen: It's the biggest acquisition we've made. As we looked at this, we were very customer-focused. In customer deals we would win the desktop deal ... but we'd lose the mobile deal to AirWatch, since we didn't have much of a mobile product. I called the customers and [asked] why AirWatch was winning. It was just a better product. ... They were investing both in product and go-to-market and we could sense their momentum. We evaluated the tool for our internal use and the IT guys also liked it. A couple of other things also really felt good: The culture of the team was very similar to ours and they have an innovation-driven culture.

InfoWorld: What about unique intellectual property? What was their technology differentiation?

Poonen: They were the only company that had built out a portfolio for everything that we call enterprise mobile management and security: mobile device management, mobile app management, mobile content management, mobile email management -- a full-blown portfolio. We're going to invest and do even more.

InfoWorld: The overlap between what AirWatch does and what you do on the desktop is not that large, other than maybe application provisioning and management. Is that the area where the two companies come together strategically?

Poonen: No, the overlap is little to nothing -- and that's actually good. We were starting to find that CIOs would have these two people under them: a VP of Infrastructure that loved our data center stuff ... and another vice president, a VP of end-user computing. People who handled all of the desktop stuff -- mostly a Windows-related environment, where you're virtualizing it or managing it -- and increasingly a mobile environment where people were handling iOS, Android, Windows phones, or whatever.

That entire group of end-user computing tools needed an underlying common framework. For example, you need single sign-on. Another underlying service could be social computing, where you have an activity stream. We will have a really broad portfolio that is the envy of the industry. It will be very easy to communicate to our customers that the mobile focus of the company, in terms of mobile management and security, will be AirWatch. We'll retain the brand, we'll amplify it, and we'll bet hard behind them.

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