“AirWatch provides best-in-class, secure, enterprise-mobile management to thousands of businesses around the world,” said Pat Gelsinger, chief executive officer, VMware. “With this acquisition VMware will add a foundational element to our end-user computing portfolio that will enable our customers to turbo-charge their mobile workforce without compromising security.”

The MDM market has boomed in recent years, and a consolidation is underway. AirWatch rival Zenprise was acquired by Citrix last year, and IBM recently acquired Fiberlink. This deal further rationalises the market, where players like Good Technology and MobileIron have enjoyed such success.

“When we started AirWatch, we set out to help businesses succeed in the mobile explosion that was set to come,” said founder Alan Dabbiere. “Now there are more than two billion smart phones and tablets in the world and more than half of those devices touch an enterprise.

“By joining a proven innovator like VMware, we now have an opportunity to bring our leading-edge solutions to an even broader set of customers and partners to help them optimize for the mobile-cloud world.” Privately held and headquartered in Atlanta, AirWatch has more than 10,000 customers globally and more than 1,600 employees across nine global offices, including Australia.

“Our vision is to provide a secure virtual workspace that allows end users to work at the speed of life,” said VMware’s Sanjay Poonen. “The combination of AirWatch and VMware will enable us to deliver unprecedented value to our customers and partners across their desktop and mobile environments.”

The deal will expand VMware’s End-User Computing group, with AirWatch’s products forming an expanded portfolio of mobile solutions within VMware’s portfolio. The acquisition will be funded through a combination of balance sheet cash and proceeds from approximately US$1 billion of additional debt to be provided by VM’s largest shareholder EMC. VMware will also continue with its ongoing share buyback program.