With VMware's (VMW) acquisition of enterprise mobility management (EMM) vendor AirWatch still in the market's rearview mirror, we wondered why many independent EMM vendors in the space are being swept up by megavendors. Here's what another mobile device management (MDM) company's CEO had to say in answer to that question.

CJ Arlotta, Associate Editor

February 14, 2014

3 Min Read
SOTI CEO Carl Rodrigues on MampA in the enterprise mobile management and mobile device management market quotMobileIron will either be bought or go
SOTI CEO Carl Rodrigues on M&A in the enterprise mobile management and mobile device management market: "MobileIron will either be bought or go public within the year," but SOTI does not "have an exit strategy."

With VMware’s (VMW) acquisition of enterprise mobility management (EMM) vendor AirWatch still in the market’s rearview mirror, we wondered why many independent EMM vendors in the space are being swept up by megavendors. Here’s what another mobile device management (MDM) company’s CEO had to say in answer to that question.

SOTI Inc. CEO Carl Rodrigues said: “A lot of these EMM vendors out there are running on VC funding, and they’re getting a lot of pressure to do something, whether it’s to go public or sell out to someone because that funding was running out,” he said.

Rodrigues used AirWatch as an a example, pointing to all of the VC funding the company received and VMware’s bridge loan of $25 million to AirWatch if the deal fails to close by June 1. “It was built to exit,” he said.

“VMware is going to have a tough pill to swallow,” he said, noting that it’s going to be difficult for a protfitable company like VMware to integrate a company that wasn’t built to be profitable.

According to Rodrigues, AirWatch’s workforce will more than likely be cut in half within the near year or so. He added that VMware will probably leverage a lot of AirWatch’s channel and sales processes.

AirWatch CEO John Marshall, on the other hand, spent this week at VMware’s (VMW) Partner Exchange (PEX), promoting the acquisition and its benefits to partners.

“We built a team that woke up every day thinking about how we move forward and how we move our customers forward with their mobile initiatives,” Marshall said.

He also told partners that AirWatch will work VMware’s ecosystem, leveraging strategic, technology, reseller and service provider partners.

Rodrigues said the market can expect to see something similar happen to MobileIron. According to him, MobileIron will either be bought or go public within the year, but MobileIron hasn’t said anything publicly on the matter.

A MobileIron spokesperson told MSPmentor back in January that VMware’s acquisition of AirWatch “is a great validation of the strategic importance of the market we lead and that we helped create but it does not change anything for MobileIron.”

The spokesperson did not give a yes or no answer on whether or not the company was looking to sell in the near future.

Potential MobileIron buyers could include companies like Oracle (ORCL), Cisco Systems (CSCO) and other vendors in the networking space, “someone who wants to bolster their offering with an MDM player,” he said, noting that “a lot of the networking players trying to compete with each other.”

With regards to the possibility of SOTI being acquired, Rodrigues said a move like that would be out of the question.

“There have been a number of companies who have tried to acquire us over the years, but, again, we do not have have an exit strategy,” he said.

After megavendors, such as IBM, VMware and others, acquire independent EMM vendors, research and development gets pushed into different directions, instead of companies focusing on mobility, he said. These megavendors integrate acquisitions into their product sets, not the other way around. 

Unlike these megavendors, SOTI has geared up for the next generation of BYOD, which focuses more on tablets becoming a customer’s main computing device, he said.

“We’re a profitable company, and we’ve always been profitable,” he said. We run our operations as an old-fashioned business, where it’s not about getting market shares or looking for an exit strategy.”

Follow CJ Arlotta on Twitter @cjarlotta for further updates on the story above.

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About the Author(s)

CJ Arlotta

Associate Editor, Nine Lives Media, a division of Penton Media

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