Airwatch buy eats into VMware profit

Virtualisation giant shows off new investment as it unveils Q2 results

VMware has talked up its new Airwatch business despite the $1bn acquisition having taken a chunk out of its profits in Q2.

For the three months to 30 June, VMware's net profit slumped 32 per cent year on year to $167m (£98.06m) on revenue which rose 17 per cent to $1.46bn over the same period.

VMware said the profit dive reflected its takeover of Airwatch but added that the new division has seen "burgeoning demand" since the deal closed. At the end of 2013, Airwatch had 10,000 customers and today it has about 13,000, it added.

At the start of this month, Airwatch enterprise mobile management products were unveiled on VMware's partner price list for the first time - a move the firm said will accelerate demand and prompt "deeper collaboration" between its own and Airwatch's sales forces.

VMware's chief operating officer Carl Eschenbach said his firm's new products were exciting for the channel.

"I came away from Q2 even more confident that we are seeing universal interest and excitement across our global customer and partner base regarding our next-generation products," he said.

The Airwatch buy fits into the virtualisation firm's end-user computing business, one of three main units the firm is placing its bets on, according to its chief executive Pat Gelsinger.

"At VMware, we are laser focused on our three strategic priorities: the software-defined datacentre, hybrid cloud and our end-user computing business," he said.

"We continue to see strong performance across our business, further evidence that VMware is uniquely positioned as IT transitions from client-server computing to the mobile-cloud era."