What does VMware's purchase of AirWatch mean for enterprise mobility?

I'm sure you have heard that virtualization giant VMware has agreed to acquire enterprise mobility management (EMM) firm AirWatch for around $1.54 billion.

What does this acquisition mean for the enterprises struggling with mobility?

Let's first look at the transaction itself. VMware announced Wednesday that it has agreed to acquire AirWatch for $1.54 billion in cash upfront, installment payments and assumed unvested equity. VMware plans to get a $1 billion loan from its parent company EMC.

"AirWatch will be the center of our mobile activities. We are really bringing together the strength we have in PCs and desktops with AirWatch's in the mobility space," VMware CEO Pat Gelsinger told Reuters.

This is the latest acquisition as part of an industry trend I identified last year--larger IT firms buying smaller mobility firms. Recent acquisitions that reflect that trend include IBM's acquisition of Fiberlink, Citrix's acquisition of Zenprise, SAP's purchase of Sybase and Oracle's purchase of Bitzer. These larger firms would rather acquire an established mobility firm than try to build their own mobility offering from scratch.

Some analysts believe that the recent acquisitions in the EMM space reflect the end of the standalone EMM provider.

As Jack Gold, founder and principal analyst with J. Gold Associates, observes: "We have been predicting for some time the demise of the standalone mobile device management (MDM) market (or enterprise mobile management, EMM, as some call it), as mobile has matured and is mainstream at nearly every enterprise…We expect more acquisitions to be announced over the next 6 months."

Standalone EMM players have been whittled down to only a few, with Good Technology and MobileIron being the most prominent. Gold expects those firms to attract suitors this year.

For the enterprise, the acquisition of EMM vendors by larger IT firms means that enterprises will have more integrated mobile-virtualization-cloud platforms available from large firms such as IBM, VMware and Citrix.

At the same time, the acquisitions of standalone EMM firms mean that there will be fewer products and vendors to choose from. This may reduce the options for enterprises and could push up the price of existing EMM products, particularly if they come with cloud and virtualization components built-in. - Fred