AirWatch is looking to build a one-stop shop for enterprise mobility
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1 AirWatch is looking to build a one-stop shop for enterprise mobility Analyst: Chris Hazelton 17 Apr, 2013 As the enterprise mobility management (EMM) space matures, vendors are expanding their reach to provide a wider range of services beyond managing mobile devices. As one of the early providers of mobile device management (MDM) for ios devices, AirWatch has seen its customer base expand rapidly around the world. At the same time, the number of vendors in the MDM market has also grown, and while AirWatch has a large (if not the largest) customer base, it is combating competition through aggressive pricing, flexible delivery formats and more importantly a growing set of products built on top of MDM. As AirWatch continues to grow, it will continue to add services organically, through partnerships and increasingly through acquisitions. The recent venture investment by Insight Venture Partners for $200m will provide a significant war chest for AirWatch to acquire IP and technologies to augment its current offerings. This will become increasingly important as the pressure on pricing for MDM bleeds over to services like mobile app management due to more competitors bringing their own services online. The 451 Take AirWatch is a very large EMM player in its own right, but its impact on the market out-sizes its physical presence. It is highly competitive in all segments of EMM, working hard to push competitors out of markets for legacy platforms so as to be in a strong position to secure new business. It has one of the largest R&D teams dedicated to EMM, so while it's competing aggressively, it's also investing in the next line of services to deliver alongside MDM. The company boasts that it is competing in every MDM deal for 20,000 devices or more; with its large direct sales force and a growing list of channel partners, this is no surprise. With the Copyright The 451 Group 1
2 company moving to expand its reach with several EMM services, we see it as a leading vendor that will continue to evolve to meet the mobility needs of IT and users. Context Atlanta-based AirWatch was founded in 2003, and claims to be the largest EMM player in the world it has more than 1,200 employees dedicated to selling and developing its enterprise mobility products. It has more than 400 staff focused just on R&D more than all the employees of some of its closest competitors. AirWatch also has a very large installed base of customers more than 6,500 which offers a number of opportunities to sell additional services. The EMM vendor claims to have nine of the top 10 US retailers, seven of the top 10 Global CPG companies, six of the top 10 pharmaceutical companies, six of the top 10 global airlines, four of the top five Global Fortune companies and two of the top three global hotel chains. In terms of financial performance, the company is growing rapidly; it saw 400% revenue growth for 2012 over We estimate that AirWatch's revenue was around $85m for This growth is not slowing down the company is expanding its international revenue, as well. Currently, 35% of its customer base is international, and it expects this to be 40% by the end of In a market that is highly competitive, and with IT's checklists for RFPs changing each quarter, AirWatch has been able to stay on the cutting edge (and even in front) of IT's needs for EMM. One key enabler of this has been the significant capital investments made by its management. Alan Dabbiere, chairman of AirWatch, has backed the company with his own money after taking Manhattan Associates public as CEO in The recent investment by Insight Venture Partners for $200m, the only VC the company has taken, values AirWatch at $1bn. Products With its roots in the MDM space enabling the use of ios and Android devices in the enterprise, AirWatch is looking to build a simple one-stop shop for the tools that IT needs. It has built out an EMM offering that includes MDM, mobile application management (MAM), corporate security and content management. Allowing flexibility to avoid the perception of vendor lock-in, AirWatch is positioning itself to serve the needs of a mobile enterprise managing devices, applications and data. Forming the baseline for its EMM offering where needed AirWatch's MDM is used to open the Copyright The 451 Group 2
3 door for additional services. Its MDM offering can be run on-premises, as an appliance or in the AirWatch Cloud. About 75% of AirWatch's customers are deploying MDM from the cloud, and this includes both large and small customers. One of its largest customers, Johnson & Johnson, has 46,000 devices running on AirWatch MDM SaaS. Licensing can be either perpetual, at $50 per device, or $3.25 per device for a monthly subscription. The MDM vendor has several million devices under management. In addition to MDM, AirWatch offers MAM, which provides an administration, provisioning and policy engine for applications. The use of a private corporate app store allows customers to brand an appstore for their employees, providing a user-friendly whitelist of applications that range from suggestions to mandatory, based on user role or group needs. This ensures that apps built, bought or rented get to the correct users, enforcing the deployment and use of company-owned apps on employees' devices. AirWatch provides both an SDK and app-wrapping to provide control of apps. The SDK can be used by organizations with their own developers to add strong controls to applications as needed, including user authentication, blocking of copy/paste of corporate data, jailbreak/root detection, certificate handling and geo-fencing. Most importantly, the SDK provides in-depth usage analytics and reporting among users to ensure an ROI for the app. The app-wrapping capability is for IT shops that don't have the development assets, but want to apply policies to applications, such as authentication, jailbreak/root detection and blocking copy/paste. AirWatch's EMM offering supports multi-user dynamic provisioning where native operating systems like ios and Android do not. For students, nurses and retail staff, AirWatch can quickly provision devices over the air for multiple users in these situations where a dedicated device for each user does not make sense. Users can log in with their corporate directory credentials, and AirWatch will configure access to apps and data files based on the user privileges determined by IT. Using geo-fencing and time-based policies, AirWatch can require that the device be returned at the end of the user's shift or class. Containing the threat In addition to provisioning credentials to mobile devices through MDM, AirWatch offers a secure gateway that allows IT to define both the users and the types of devices they can use to connect to Microsoft and Google corporate services. IT can monitor and report devices and users that are trying to connect, regardless of whether they are enrolled in MDM. A key component of management is the control of attachments. AirWatch can enforce the use of its Secure Content Locker. This means that all attachments are encrypted using AES 256 Copyright The 451 Group 3
4 as they pass through AirWatch's gateway, and can only be opened in an encrypted container. This container approach means AirWatch can block attachments by type and, while doing a selective wipe, remove documents from this container. Customers AirWatch has an impressive stable of customers that includes many very large multinationals. Its EMM software and services are provided in more than 18 languages. Lowe's has more than 50,000 devices managed by AirWatch, the majority of which are ios. United Airlines has more than 11,000 pilots using ipads managed by AirWatch. Other large customers include Best Buy, Sears, Johnson & Johnson and Shell, among others. Partners AirWatch has an expanding channel partner program that includes AT&T, CDW, Singtel, Sprint, Telefónica, Verizon and Vodafone. Other partners include device vendors Apple and Samsung. It is a member of Samsung's SAFE and KNOX offerings promoting the use of the vendor's Android devices in the enterprise. It was one of just a few MDM vendors recommended by Apple back in It has partnered with Fixmo to integrate Fixmo SafeZone and Fixmo Sentinel Integrity Services into AirWatch's EMM offerings. It has also partnered with key NAC provider ForeScout, integrating the IT consoles for AirWatch and ForeScout's CounterACT network access control. AirWatch also partners with NitroDesk to provide fine-grain control of the latter's TouchDown client. Competition While there are several players in the EMM space (more than 100), there are a few key competitors for AirWatch. The most direct competition in the expanding MDM market, including app management, is MobileIron. For secure and content, Good Technology's Good For Enterprise is also a competitor. Good's Dynamics runs up against AirWatch's MAM offering. Other large EMM competitors include Citrix, Dell, Fiberlink, IBM, Kaspersky Lab, SAP, Sophos and Symantec. Bitzer Mobile also offers a container approach for , apps and content. Apperian and Mocana provide an app-focused competitive approach for organizations that want to use MAM in place of MDM. AirWatch has a sizeable installed base of companies still using Windows Mobile, but these companies offer an attractive target since they convert these devices to Android and ios. Competitors also supporting Windows Mobile in a big way include LANDesk, which acquired Wavelink, and SOTI. AirWatch is aggressively going after the Windows Mobile market by offering Copyright The 451 Group 4
5 highly competitive pricing for these devices (read 'nearly free') in an effort to undercut these competitors. SWOT Analysis Strengths Weaknesses AirWatch is a large early player in the MDM space, with the ammunition to slug it out in a highly competitive market, and is backed up by a sizeable R&D team to keep it on the cutting edge of EMM. Opportunities Threats It has the staying power, which only a few players have, to become one of two or three go-to vendors in what will be a very large market as EMM's reach expands into the enterprise. There is price pressure on MDM, which is its primary product, and this may spread to services like mobile app management due to more competitors bringing their own services online. There are some even larger players that are turning their eyes to mobile, which could extend this shakeout period for the EMM market. Copyright The 451 Group 5
6 Reproduced by permission of The 451 Group; This report was originally published within 451 Research s Market Insight Service. For additional information on 451 Research or to apply for trial access, go to: Copyright The 451 Group 6
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