Tag: Zenprise

AirWatch raises $200m to propel growth

Ben Kolada

Contact: Ben Kolada, Chris Hazelton

AirWatch, considered one of the largest mobile device management (MDM) vendors, has raised $200m in its first round of outside funding. Insight Venture Partners led the round. This round of funding will build on several hundred million dollars the company has already invested in its MDM products and now-growing focus on mobile application deployment and management.

Terms of the investment weren’t disclosed, but we’re told the funding round values AirWatch at a whopping $1bn, which no doubt restricts its options in terms of an exit. The largest MDM acquisition we’ve seen so far was Citrix’s takeout of Zenprise for $327m. Zenprise had raised a total of $79m.

The investment will be used to increase staff in Asia as the company looks to build on 2012 revenue of nearly $100m, expanding on earlier international growth. Specifically, AirWatch says the funding will be used for product development and strategic M&A. The latter is particularly noteworthy, since the company has so far focused solely on organic growth, and hasn’t announced a single acquisition since its founding in 2003.

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Shakeout looming in MDM sector?

Ben Kolada

Contact: Ben Kolada

The crowded mobile device management (MDM) sector is likely to see a shakeout in the near future. By one account, there are already more than 80 firms vying for space in the growing MDM market. As the sector’s more notable vendors increasingly advance ahead of the competition, we expect laggard firms will either shutter their doors or be picked off one by one in small bolt-on technology acquisitions. But as the sector narrows, the future may shine brighter for firms that are making names for themselves.

As the smartphone and tablet take more overall computing share from laptops and desktops, the need for MDM will accelerate. Increasing adoption of tablets, in particular, is driving MDM demand. According to a report by ChangeWave Research, the survey arm of 451 Research, 23% of respondents said they plan on purchasing tablets for their employees in the first quarter of 2012, up from just 5% in the fourth quarter of 2010.

As the largest acquirers continue to consolidate the software stack, we expect to see them move into the MDM market. IBM has already announced a couple such acquisitions, picking up BigFix in July 2010 for an estimated $400m and Worklight in January for an estimated $70m. Dell and BMC are also expected to be eyeing this market, and would likely look at the frontrunners – firms like AirWatch, BoxTone, Good Technology, MobileIron and Zenprise, to name a few – as their top acquisition choices. But these firms aren’t likely to be had for cheap. We’ve already heard rumors that one of them is looking for a $400m-plus exit, and that another was previously in the sights of a $250m deal. Meanwhile, valuations will likely rise as these vendors continue growing. In 2011, Zenprise tripled its headcount, while MobileIron doubled its employee base. AirWatch’s headcount hit 400 last year, and it expects to double that this year.