BlackBerry’s pivot to mobile security software is complete. Will it matter?
It’s been a long, strange journey for BlackBerry, but its executives insist it has finally arrived.
The once-iconic Canadian company which pioneered data on a mobile device has re-branded itself as a multi-OS mobile security software platform. Through a series of smart acquisitions, BlackBerry has come to dominate the market segment and its future looks bright, Global Sales President Carl Wiese told CyberScoop in a recent interview.
“The turnaround [promised three years ago by then newly minted CEO John Chen] has been done from a financial perspective,” Wiese said.”Now it’s about the transformation from a hardware to a software company … [and] a change in business model on the device side to a royalty based model,” in which the company licenses its brand to other device manufacturers.
It’s the second change that got all the attention recently, when Chen announced that the company would cease to make its own devices.
He had promised that the device business would be closed if it didn’t make money — something that required annual sales of at least 3 million units. In September, with sales still not crossing the million mark, Chen made good on his word.
But by that time, software licensing was already at the heart of the company’s strategy — and BlackBerry’s secure communications hub was available to consumers for a dollar a month.
BlackBerry’s transformation into a secure-mobility software play has been underway a lot longer than most people realize. Since Chen took over, the company has spent a billion dollars in a series of acquisitions which enabled it to offer, in Wiese’s words, a suite of “value-added services to the enterprise, to move beyond just [mobile] device management.”
It’s a bold attempt to leverage BlackBerry’s reputation for security across the software stack, he said.
Here are the services BlackBerry can now offer as a result of acquisitions:
- Good Technologies: Good was the most expensive acquisition on Chen’s shopping list. Purchased in Sept. 2015, Good had a patented encrypted container that rests on a mobile device which can keep corporate data secure even if the device is stolen or compromised. The company also had a software development kit that lets customers develop their own apps using the security of the container. “They also had a 70 percent iOS user base,” said Wiese, which made them useful for BlackBerry’s OS-neutral play.
- WatchDox: Acquired in May last year. A digital rights management/data encryption system that allows enterprise-wide file sync-and-share controls on both mobile and desktop endpoints — remotely revokable by administrators.
- Secusmart: Bought in Dec. 2014, the German secure voice and text messaging company was already partnering with BlackBerry to sell secure communications to a Berlin government still reeling from revelations that the National Security Agency had eavesdropped on Chancellor Angela Merkel’s unencrypted smartphone.
- Movirtu: In Sept. 2014, BlackBerry bought the London-based startup for its virtual SIM-card technology, which allows a user to switch seamlessly between a business number and a personal number on a single mobile device — with separate billing and security measures on each one.
- Encription: BlackBerry bought the 40-strong British pentesting and professional services firm in February this year.
- AtHoc: In July 2015, BlackBerry purchased this Silicon Valley company that provides two-way crisis communications to more than three million users across U.S. military and civilian agencies including Homeland Security, Energy and Treasury — and to commercial and non-profit organizations including the American Red Cross.
Once you have the “end-to-end security from the top of the enterprise to the mobile device in the hands of the user” that BlackBerry provides, said AtHoc President Guy Miasnik, “You can build on top of that business applications …[like email.] AtHoc is an application which builds on the security [of that infrastructure] to provide emergency communications” that are two way, flexible and redundant.
If all communications channels are working when the emergency messaging system is activated, users might get a “phone call, a text message, an email, and a push notification to an app.”
“We’re also able to operate PA systems, digital displays … even radio communications” like the transceivers used by police forces, said Miasnik, a Harvard Business School graduate who served in the Israeli Defense Forces for five years.
But it is the Good Technology acquisition that has caught the public eye. Between them, the companies had nearly a 20 percent market share of the growing enterprise mobility management market segment last year, and one analyst called the combined company an “800 lb gorilla.”
Others market analysts agree that the acquisition has helped.
“BlackBerry has a large installed base” in the market, Phil Hochmuth, of IDC told CyberScoop — principally through the BlackBerry Enterprise Server, which is now at the center of their multi-platform software play. “They are in a better place to maintain that base they were before buying Good,” he said.
He thinks abandoning the device market was the right move. “That was a very tough market for them,” he said, “They were losing market share, losing money … Now they can focus on enterprise mobility management,” which is a higher margin business and a much faster growing market.
The EMM market grew by 24 percent year on year last year, Hochmuth said. There are many vendors but Blackberry is one of seven dominant players — the others being Citrix, AirWatch, MobileIron, Microsoft, SAP and IBM.
A recent Gartner survey of “Critical Capabilities for High-Security Mobility Management,” found BlackBerry the leading product in all six categories.
Consultant Randy Siegel is also bullish about the company’s prospects.
BlackBerry “is still very widely deployed … and has some great qualifications and deep and loyal contacts across government – particularly the [Defense Department],” he said.