**Editor's Note: Please click here for a recap of the biggest channel-impacting mergers in Q4 2013.**
VMware has gone mobile with the $1.54 billion purchase of AirWatch.
The deal, announced Jan. 22, gives virtualization behemoth VMware a foothold in mobile device management (MDM) as businesses face the task of securing employees' smartphones and tablets. AirWatch is considered a giant in the MDM space and Ovum analyst Richard Absalom expects similar transactions to arise now that VMware has set the stage.
“We expect the VMware-AirWatch deal to kick-start a surge in M&A activity in the space over the next six-12 months as the remaining megavendors buy their way into this fast-growing market," he said in a client memo on Wednesday.
VMware is looking to AirWatch to expand its mobility strategy.
"Where VMware has specialized in mobile virtualization to manage enterprise mobile estates, AirWatch will give it tried and tested alternative features in mobile device management, mobile app management and mobile content management," Absalom said.
Sanjay Poonen, a VMware executive vice president, said much the same in a blog post on Wednesday.
“As we look around our industry, mobile is global," Poonen wrote. “The world needs a robust enterprise mobility platform for the post-PC world of heterogeneous devices."
As such, VMware will pay $1.18 billion in cash for AirWatch, as well as $365 million in installment payments and assumed unvested equity.
VMware has snapped up what Absalom calls "one of the clear leaders" in enterprise mobility management. The MDM space is ripe for consolidation -- more than 100 vendors compete for enterprises' attention. AirWatch's main rivals include SAP AG, Good Technology Inc., Citrix and MobileIron. Absalmon said the VMware purchase marks a "successful exit" for AirWatch.
“Privately owned AirWatch has been one of the clear leaders in the enterprise mobility management market, exhibiting phenomenal growth over the last few years," he said. "It now boasts 1,600 employees and 10,000 enterprise customers globally. Having received $200 million in investment in early 2013 and using it to acquire Motorola's mobility services unit, as well as pushing aggressive organic growth, the exit price will no doubt be pleasing to AirWatch's founders and investors."