VMware, the biggest maker of software that lets computers run different operating systems, agreed to buy AirWatch for as much as $1.54 billion, adding technology to help businesses manage mobile devices.
VMware will pay $1.18 billion in cash and $365 million in installment payments and assumed unvested equity, the Palo Alto, Calif.-based company said in a statement.
The surging popularity of smartphones and tablets is forcing businesses to secure a multitude of devices as employees move away from personal computers. AirWatch competes in the mobile-device management software market with firms such as MobileIron, Citrix Systems, SAP and Good Technology. VMware needs AirWatch to fill out its line of management tools for gadgets that touch individual users, Chief Executive Pat Gelsinger said.
International Business Machines plans to invest $1.2 billion to expand its cloud services, bolstering a business that it’s counting on for growth after acquiring SoftLayer Technologies last year.
IBM, the world’s largest provider of technology services, plans to add 15 new data centers worldwide by the end of 2014, said Lance Crosby, chief executive of SoftLayer. IBM is winding down its separate SmartCloud Enterprise product as early as the first quarter of this year, except for a premium service that will be offered along with SoftLayer’s, he said in an interview.
IBM is trying to keep up as customers shift from buying their own computer servers to relying on the cloud, where data and applications are delivered online instead of being stored locally. A slump in demand for hardware has contributed to six straight quarters of declining revenue.