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MobileIron CEO change fuels acquisition speculation

As MobileIron CEO Bob Tinker steps down from the helm of the company he founded, analysts wonder if an acquisition of the enterprise mobility management provider will be next.

A change in CEOs has experts pondering whether MobileIron, the last major standalone EMM vendor, will sell itself.

MobileIron CEO and founder Bob Tinker stepped down this week, and the company named Barry Mainz, former president of embedded software provider Wind River, its new president and CEO. The sudden leadership change may have been a move to appease the company's board of directors, said Bob Egan, CEO and chief analyst of the Sepharim Group in Falmouth, Mass.

"Swapping out the CEO is a very specific move, and [the board of directors] is not happy with his performance in the company," Egan said. "The CEO is judged by stock performance and revenue growth. They had to take some action."

The MobileIron CEO change may indicate that the company will follow the path of many of its competitors by setting itself up to be acquired. In a written statement, the company did not deny that possibility.

"Like any publically traded company, we are always open to exploring strategic options," the statement said. "The focus of the management team and the board is to create shareholder value through building great products and satisfying customer needs."

EMM competition stiffens

MobileIron went public in June 2014 at $9 per share, but its stock price has since fallen below $4. The company is still a top player in the enterprise mobility management (EMM) market -- it has a 9.2% market share, according to a June 2015 report by IDC, and is a leader in Gartner's Magic Quadrant -- but it faces many challenges.

"As the industry continues to evolve, there is a lot more emphasis on identity management and content distribution security," Egan said. "MobileIron has small components of a few things there, but they are not a top-tier company in those regards."

MobileIron has to do something to stay in the game.
Michael Finneranprincipal analyst at dBrn Associates

VMware bought MobileIron's biggest competitor, AirWatch, for $1.54 billion in early 2014, and it has since surpassed MobileIron in revenue. In November 2015, BlackBerry closed its acquisition of Good Technology for $425 million. Other large enterprise software vendors in the market include IBM and SAP, which also bolstered their offerings by acquiring standalone EMM vendors.

"MobileIron has to do something to stay in the game at the level they are at, and selling out might be the way to have a fuller product line," said Michael Finneran, principal analyst with dBrn Associates in Hewlett Neck, N.Y.

In the past year, Microsoft's Enterprise Mobility Suite has emerged as a new contender. Microsoft includes its EMM offering in its software licenses, allowing many existing enterprise customers to receive the suite for free. Even Microsoft customers who are satisfied with their current EMM providers could naturally consider making a switch to Microsoft.

"Microsoft is the company that most people are most scared of and has definitely emerged as a serious player," said Eric Klein, director at VDC Research in Natick, Mass.

MobileIron CEO passes the baton

Tinker had been at the helm of MobileIron since starting the company in 2007, and he will remain on the board of directors. MobileIron began to search for new leadership after its business struggled in the early part of last year, and the change was necessary for the business to grow, Tinker said.

"This is like a relay race," he said on a media conference call. "I ran the first leg, took it from a whiteboard idea to commercial product with 10,000 customers, and now I'm passing the baton to Barry, who's got the next leg."

Coming from Wind River, an Intel subsidiary that specializes in Internet of Things technology, Mainz has a track record of expanding a software business into a growth market.

MobileIron doesn't report its fourth-quarter financial results until early February, but it expects its revenue to land between $42 million and $43 million, beating its guidance of $41 million to $42 million.

"It sounds like they are doing OK from the results, but they are reporting revenue and not profits," Finneran said.

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