VMware: Disruption Through an Innovative M&A Strategy

Shekar Ayyar

Shekar Ayyar, Corporate Senior Vice President, Strategy and Corporate Development, VMware

By Shekar Ayyar, Corporate Senior Vice President, Strategy and Corporate Development, VMware

At VMware, we have achieved our ranking as the fourth largest software company in the world according to Forbes by disrupting the market through virtualization. We are fearless innovators. To fuel our innovation, we continuously complement our best in class R&D engine with the infusion of inorganic technologies and talent, carefully integrated to deliver execution success.

Lots of companies do this. We do it well.

In the context of announcing our next acquisition, I want to share how our M&A strategy helps sustain and propel our competitive market position. Starting from our beachhead in server virtualization, we have expanded our capabilities in the software-defined data center and Cloud by spanning compute, networking, storage, and management. We continue to bring increasing agility and efficiency to our customers, enabling them to lead in the midst of fast-transforming business and technology environments.

We’ve been a pioneer and leading innovator in “software-defined” for more than 15 years. We’re now applying the benefits to the entire Software-Defined Data Center (SDDC), Cloud and End-User Computing environments to power the shift to digital business for our customers.

Thoughtful M&A Agenda.

To get there, we need both to champion our own internal innovation, and to augment those efforts through acquired inventions. This can help us enhance our current and developing product portfolio, always staying at the forefront of market leadership. Here are three key tenets of our M&A strategy:

  • Platforms. Platform acquisitions are transactions that are transformational to our business because they open new industry adjacencies for us. Cases in point: Nicira—a key component of our SDDC strategy—enables dynamic virtual network infrastructure by leveraging an open overlay approach. We have used this acquisition to create VMware NSX, now the industry-leading network virtualization platform, delivering security and dynamic network configurability to our customers. AirWatch is another example of a platform acquisition that has opened up a new opportunity. It expanded our Business Mobility solutions to extend to the secure management of mobile devices, apps, and content, resulting in increased productivity for our customers. Our flagship Workspace ONE platform is built using AirWatch as a foundation.
  • Acceleration acquisitions add new value to our existing platforms in a tangible way. A recent example here is the acquisition of Boxer. Boxer’s technology offers us a robust mobile personal information management (PIM) client to secure email, calendar, contacts and tasks in our AirWatch architecture. It has been an incredible infusion of team, technology and vision that we have merged with AirWatch to help take our Business Mobility offerings to the next level.
  • Tuck-ins. Some of our transactions are focused on filling a feature gap, or potentially fulfilling a need for specialized talent. One example is our acquisition of Immidio. With Immidio, VMware has delivered a native User Environment Management (UEM) solution that provides customers with a consistent and dynamic desktop experience.

Importantly, our M&A strategy has always dovetailed with our corporate strategy and goals, enabling our customers to achieve business success by efficiently utilizing and managing their diverse application, cloud, and device environments.

Which Brings us to Today’s News.

I’m excited to announce our intent to acquire Arkin, a company that has quickly become a leader in assisting the deployment and operations of software-defined networks in the SDDC. You can read the full press release here.

As organizations globally adopt software-defined data center architectures to deliver automation, security and continuity for applications, VMware NSX network virtualization is being widely adopted in large scale production deployments.

Arkin’s management platform is purpose-built for NSX and helps enterprises adopt, integrate and deploy next-gen network virtualization and security technologies. Identified by Gartner as one of the “Cool Vendors in Enterprise Networking, 2016,” Arkin’s management solution helps customers accelerate NSX adoption and deployment, a core tenet for SDDC and the private cloud.

Upon the closing of the acquisition of Arkin, the VMware vRealize Suite will have the ability to extend across the entire SDDC, including the VMware NSX network virtualization layer. Arkin is expected to help create a bridge and accelerate two of our key growth businesses: management and networking.

Until Next Time…

As VMware continues to bring innovative solutions to customers through internal development as well as strategic M&A, I look forward to sharing more about our ongoing strategy and execution milestones.

To Continuous Innovation!



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