As a network professional, it can be difficult to maintain a sense of perspective in relation to other areas of IT. Certainly, networking is the foundation on which all other services depend but it isn’t all that important to customers overall.
VMware announced that it was buying AirWatch to boost it’s VDI capability in mobile device management space.
VMware will acquire AirWatch for approximately $1.175B in cash and approximately $365M of installment payments and assumed unvested equity.
To give you some perspective, VMware bought Nicira in July 2012
VMware will acquire Nicira for approximately $1.05 billion in cash plus approximately $210 million of assumed unvested equity awards. The acquisition is subject to regulatory approvals and other customary closing conditions.
Now, I’ll agree that these companies are at different stages of maturity and that buying Nicira was much more of talent, team and patent acquisition while AirWatch has real products and revenue. But VMware is paying the same amount for an MDM as they did for an entire SDN strategy and entry into the networking market. Both acquisitions are a significant chunk of VMware relatively small annual revenue of slightly more than USD$5 Billion.
It’s a salient reminder that networking is a service foundation but isn’t actually all that valuable in terms of delivering revenue. Keep a sense of perspective. A gear box in a car is a useful component but it’s not the whole car.