VMware said Wednesday it plans to acquire AirWatch, in a move to extend its vision of using software to manage the surge of mobile devices in the workplace.

VMware agreed to pay $1.175 billion in cash and approximately $365 million of installment payments and assumed unvested equity.



The acquisition is a bold move by VMware CEO Pat Gelsinger, who is about 18 months into the job. It's also a clear challenge Microsoft, BlackBerry, Intel, and a raft of smaller mobile management companies, such as MobileIron and Good Technology.

AirWatch is a private company based in Georgia. AirWatch raised a $225 million Series-A round last year from Insight Venture Partners and Accel Partners, and the purchase price was rumored to be higher than VMware's $1.26 billion purchase of Nicira in 2012.

