VMware announced an eye-popping, $1.54 billion acquisition of Airwatch, a mobile device management (MDM) provider. Airwatch, a private company, is believed to have had 2013 revenues in the $85-$100 million range, which puts the deal valuation at a whopping 15x trailing revenues. The lofty valuation by VMware is a bet that Airwatch has a first-class ticket on the fast moving training that is MDM software. So far, the bet looks safe as Airwatch has purportedly been growing at nearly 40 percent quarter over quarter.

VMware’s seemingly aggressive move can be rationalized by considering that MDM encompasses the software tools required by information technology (IT) organizations to manage, secure, and monitor mobile devices in the enterprise. According to the industry research firm, Gartner, Inc., over 2 billion mobile devices are expected to ship in 2014 alone, and a large percentage of those devices will be utilized by employees while at work.

Mobile devices have been disruptive to the status quo of PCs in the enterprise – just ask Steve Ballmer, the CEO of Microsoft. The fact is that mobile device shipments are dwarfing PC sales, and the enterprise is just figuring out how productive the use of mobile devices in business can be, i.e., mobile devices can do everything PCs can do — and more — from anywhere.

The mature PC market has hundreds of proven tools that IT can leverage for configuration management, patch management, anti-virus, asset management, and even remote control. In contrast, the MDM market is relatively nascent. And while more and more management vendors are coming out with mobile management products, the mobile device use case within businesses is exploding.

Early MDM tools, including Airwatch’s products, focused on functionality that could set user policies. These include setting passwords, application usage, controlling employee access to corporate resources, prohibiting the jail-breaking of corporate devices, and security features that can wipe corporate data clean from the device if compromised.

Most MDM solutions typically offer support for the popular BYOD (bring your own device) trend. BYOD lets employees use their personal devices for work yet segregate work-related information from their private information. MDM vendors have expanded their portfolios to include mobile application management (MAM), which gives IT more granular control of what applications can be run and how they can be used. There is a hyper-sensitivity to data breaches, so controlling content on mobile devices – specifically corporate data – is the next frontier for MDM.

For software companies, there is a pot of gold at the end of the MDM rainbow. Gartner believes the market will balloon to $1.6 billion in 2014, which will still only account for 30 percent penetration in North America and much less elsewhere. Not surprisingly, software powerhouses like IBM, SAP, Citrix, and now VMware are gobbling up MDM providers.

This boon in MDM will be a net positive for businesses and IT teams looking to secure their mobile devices. Vendors are already competing on price, and new functionality is being added with alacrity. But vendor selection should be made with caution as more consolidation in the space is on the way. Furthermore, many MDM solutions are developed on an island, with no regard to managing laptops, desktops, and servers already in the enterprise. A more prudent approach would be to evaluate “one-size fit all” solutions that support laptops, desktops, servers and mobile devices.

VMware’s $1.54 billion acquisition may raise some eyebrows, but on closer inspection is reflective of the importance of mobile devices in business today.