AirWatch was founded back in 2003 - right around the time we ourselves began to cover enterprise mobility in-depth. The market was slow to emerge and we certainly remember tiny little AirWatch booths at certain trade shows - the kind of booth you would look at with a sense of "Hmm" written all over it. Then around 2007 - 2008 the tiny show booths started to become much larger, and today, with 6,000+ customers in hand and well over 500 employees in tow, Airwatch can only be described as a success.
The company has never taken in a single dollar of outside funding - it has been closely and successfully driven by Chariman Alan Dabbiere and CEO John Marshall (News - Alert), a duo that has a long history together dating back to the mid-1990s. The company has played the mobile enterprise game extraordinarily well, and at today's trade show events AirWatch is now among the companies that sport the largest - and typically busiest - booths at those events.
There isn't any extravagance here - some booths you look at and you know a company is grasping at straws to impress. AirWatch is always there simply to do business - and that is the thing that impresses.
Recently we've covered a number of AirWatch product announcements and partnership announcements as the company positions itself to move away from a focus solely on mobile device management (MDM) and towards becoming a much larger "enterprise mobility management" (EMM) player. To do so requires delivering constant state of the art updates to existing platforms, integration with partner technology and constant delivery of new IP.
Clearly much of this is the reason behind today's announcement at the 2013 Mobile World Congress by AirWatch that it has closed a $200 million Series A round of investment. This first-ever round of external funding is being led by Insight Venture Partners. We've long anticipated AirWatch reaching out for VC dollars, but we confess we would never have guessed that AirWatch would commit to such a large number of dollars. It is a substantial war chest to have in hand.
For Insight Venture Partners it is all about taking advantage of a hot market - striking while the iron is hot, so to speak. "We’re excited to partner with John, Alan and the terrific AirWatch team,” notes Jeff Horing, managing director, Insight Venture Partners. “The mobile enterprise market is experiencing explosive growth, and AirWatch has emerged as the market’s leading device management solution, without raising any outside capital. As its first institutional investors we hope to support AirWatch’s strong growth trajectory and further strengthen the company’s leadership in the field.”
To be sure, not all of that investment needs to be spent - and of what AirWatch will spend, not all of it needs to be spent all at once. What this level of funding does is to add a huge amount of financial stability to a company that is already internally stabile.
Yes, it will help to drive global growth and as we noted above it will certainly help drive innovation, and will help to drive adoption of AirWatch’s platforms. But the real key, we believe, is that it gives AirWatch the necessary financial muscle to begin growing much more rapidly than it ever could on its own.
To date the company has grown organically - through product development and customer buildup. But now that the market is about as hot as it can possibly get, AirWatch needs to be able to grow much more quickly and scale to a size that Fortune 500 companies will trust to deploy across their entire global businesses. This is non-trivial for the Fortune 500.
AirWatch currently claims that it manages the largest mobile management deployments for the top three global Fortune companies, the top four global energy companies, six of the top 10 global airlines, six of the top 10 global pharmaceutical companies, seven of the top 10 global consumer product companies, five of the top 10 global luxury goods companies, two of the top three global hotel groups, nine of the top 10 U.S. retailers, and three of the top five U.S. medical device companies.
But it is safe to say that most of these are deployments not delivered from the top down at the senior CIO/CTO level but more virally at group and division levels. One small group inside a Fortune 500 company still allows a company to claim that enterprise as a customer. AirWatch now needs to scale to move up the chain of command to the senior level management teams of the Fortune 500 and to grow business across entire Fortune 500 enterprises.
We will note that AirWatch is already well-positioned to handle smaller deployments as well in the SMB space. But now the company can catch much larger fish.
Major Growth is in the Forecast
AirWatch needs to execute on sales, marketing and IP development. And, AirWatch needs to ensure that it has a clear and clean market for itself. What does this mean? Last year we had a long chat with AirWatch chairman Alan Dabbiere - at the time he noted that he was anticipating some industry consolidation and correctly predicted that Symantec would make a move to begin that process (Symantec subsequently acquired MDM vendor Odyssey Software (News - Alert)). But there is still a great deal of noise out there - and some confusion about which mobile device and BYOD security platform to employ and deploy.
With a $200 million war chest in hand, AirWatch is now nicely positioned to begin cleaning up that noise - whether the goal is to acquire tuck-in technology, seasoned sales and marketing personnel (including greatly expanding its international reach) or simply to buyout and eliminate potential technology that might otherwise prove confusing to enterprises. When you clear up the noise the choices enterprises have available to them become much clearer - and this creates significant advantages for AirWatch.
Finally, AirWatch needs to be a position to deal with competition from extremely sizable players. Just last week, for example, both IBM and F5 announced their own major new mobile security and BYOD management initiatives. The new funding allows AirWatch to go head to head with these kinds of competitors.
AirWatch also announced today that it is now fully integrated and compliant with a new security capability that Samsung (News - Alert) Mobile introduced today. Dubbed KNOX (which certainly looks to play off of Fort Knox and its well-known security), the new platform will - stop us if this sounds familiar to BlackBerry (News - Alert) Mobile Fusion, BlackBerry Balance and BlackBerry Enterprise Service 10 - allows IT admins to keep workforce personal and work data completely separate by operating at the application layer level across all supported Samsung Android (News - Alert)-based devices (that is, those devices that Samsung will use to specifically target the enterprise). Keeping corporate data separate should substantially reduce data leakage, as well as protect against viruses and other malware.
Very interestingly, KNOX incorporates an enhanced security version of Android developed by the National Security Agency (NSA). It supports integrity management services on both the hardware and Android level. As the AirWatch integration will attest, clearly it also fits in easily enough with existing MDM solutions.
Per Samsung, KNOX will be commercially available in selected Samsung GALAXY devices from Q2 2013 onwards. Samsung has not specified which devices it will support yet though it's safe to say its high end Galaxy phones and tablets will likely make up most if not all of the mix. In any case, when it launches AirWatch will be there with full support.
All in all it's been a heady day for AirWatch.
Edited by Amanda Ciccatelli