This morning VMWare announced it will acquire AirWatch for almost $1.2 billion.  AirWatch is a leading provider of software solutions for enterprise mobility, and are arguably the leader of Mobile Device Management (MDM).

For those following the Enterprise Mobility space, or for readers of this site, the fact that AirWatch is getting acquired is not a complete surprise. At Mobile World Congress AirWatch sprang for a giant booth in Hall 3 where the big boys exhibit, right next to both Qualcomm and Intel. The booth probably cost a measurable percentage of the company’s annual revenue, but it served its purpose of announcing to the world that AirWatch had big ambitions.

Put simply, MDM is what it sounds like – a way for corporate IT departments to remotely manage mobile devices. This includes things like synchronizing corporate e-mail and calendars, device security and remote wipe of devices. In my post from last August, I pointed out the enterprise mobility space was moving incredibly fast. The mobile requirements for enterprises remain highly fluid, with a new concept emerging every nine months or so. I noted that the leading companies of the day, including AirWatch, were promoting MDM, but that the market was quickly moving past that concept.

I concluded that post by saying:

“Enterprise mobility has gone through successive waves, and is now poised to be swallowed by larger software entities. Apps will be federated to work with corporate access tools tuned into smartphone identity management. And we will move from a world in which we had the network control the device to the opposite one in which the device will control, or at least access, the network.”

Today’s news fits pretty squarely inside that. I think it is likely that some of the other big software players make acquisitions soon. The trouble with that, and with the whole industry, is the fact that there are many companies to choose from. It has become a very crowded space, with companies going down many different avenues.

Enterprise mobility, especially security, is challenging because of the underlying operating system (OS) dynamics. There are essentially two OS’s today to contend with – iOS and Android, and they have diamaterically opposite approaches to secruity. Everything on iOS is locked down, to the point that there are no true third party security solutions, just applications which run on the phone like any other app. This provides a very secure shell in which the app can access behind-the-firewall data, but nothing else. Only Apple can remotely wipe a device. By contrast, Android lets anything happen, but at the cost of a very insecure environment. To this day, there are many enterprises which will not allow their users to access corporate data via an Android device. Solutions such as AirWatch can make things a bit more secure, but there is always a risk that someone can attack the device from layer further down. For the most part existing solutions have simply pushed that security threshold so far down the software stack that it becomes very hard to attack the device, but never impossible.

A broader problem for the industry is the trade-offs required for distribution. The best solution is to have a software layer that can work on every device. IT departments could then require every user to install that software. To achieve this, the mobile software companies need to have a big enterprise salesforce. AirWatch raised a few hundred million dollars just ahead of MWC last year, and now has 1,600 employees. Smaller companies without those kinds of resources, have sought out distribution deals with the various OEMs. This effectively meant that LG has one solution, Samsung another, etc. which is a headache for corporate IT departments.

That is why I think the current generation of mobile enterprise solutions will end up inside the major software vendors, companies with giant salesforces capable of pushing their various solutions. VMWare for AirWatch is likely just the first.

One final note, in their press release today, VMWare said that AirWatch’s Atlanta office would become the center of VMWare’s Mobile products. It will be interesting to see how that plays out. VMWare, like many of the other enterprise software giants, are still trying to figure out their mobile solutions. Is ‘mobile’ just one feature in their broader offering? Or should it be part of a larger, different strategy built on the assumption that mobile is the computing platform of the future? That may sound far-fetched, but could very well come to reality.