BlackBerry Ltd. (NASDAQ:BBRY) has bought mobile device management provider, Good Technology in a cash deal worth $425 million, reported by Market Watch. The Canadian company made this acquisition to help it expand its business and attract more customers.
BlackBerry has taken this step while it is facing an uphill struggle to resurrect its mobile hardware business. More so, it is widening its focus toward mobile enterprise security solutions, having served as an expert in delivering secure enterprise platforms. Previously, Blackberry was a market leader before Android and Apple stepped in.
After that, the company lost its dominant position rapidly, with the company’s hardware market plunging to just 1.5% in a recent July report, from over 42% in September 2009, with some sources claiming it to be under 1%.
BlackBerry executives were positive over the acquisition. COO Marty Beard felt the move was a logical step taken by the company to expand its enterprise mobility across multiple platforms whereas CEO John Chen stated that the companies linked up well to put mutual focus on security. He further said that future projects would be very helpful for the company’s progress.
Mr. Chen also expressed a desire to move into the subscription business, which is a revenue driver for Good Technology. This offers the company an existing platform to promote its upcoming subscription push, which could arrive in the form of security enterprise offerings. In 2014, BlackBerry bought a voice encryption firm, Secumart, besides purchasing enterprise file security start-up WatchDox in April.
Good Technology filed for an S1 in May 2014 but never prompted an IPO. The company has seen several hurdles and survived various layoff rumors, which surfaced in light of its $24 million debt. This led one industry insider to claim the Good Technology takeover represented two struggling companies that might work better in tandem with each other.
Constellation Research founder R Ray Wang claims Good Technology offers some of the “best enterprise mobility management products on the market.” Mr. Wang felt BlackBerry could go cross-platform into iOS and Android to offer enterprise mobility management services with over 70 security certificates. He also addressed the ability of working together in the burgeoning Internet of Things segment.
We believe the acquisition will be beneficial for both companies, giving Good Technology a safety net without having to risk an IPO in a cut-throat market. As for BlackBerry, it now has access to a greater range of enterprise tools that can further the company’s portfolio in the all-things connected market and mobile software play.
BlackBerry is yet to officially throw in the towel as far as hardware is concerned, and there is interest in the company’s adoption of Google’s Android OS. The company failed to gain momentum with the release of BB 10 OS, but the arrival of a keyboard-slider phone called the BlackBerry Venice could mark the arrival of a new custom layout integrated into the company’s revered security solutions to offer a relevant hardware to the market.
The Internet of Things still needs to be fine-tuned in order to enter mass production. The use of Internet-powered doors, locks, lights and thermostats will require vital security components to power. This leaves room for the company to create a niche within the segment, which is vital for safe usage and regulation.