BlackBerry Drops $425M to Try to Lure Corporate Clients Back
Today BlackBerry announced that it has agreed to acquire mobile security company Good Technology for $425 million in cash.
Good’s technology will complement BlackBerry’s existing BlackBerry Enterprise Server (BES) product, a tool for managing corporate devices including BlackBerry handsets as well as Android and iOS gadgets, and for encrypting email and messages. Though BlackBerry first began supporting Android and iOS on BES in 2011 after it acquired device management company ubitexx, it still provides more security features for its own devices than for third party platforms. BlackBerry is hoping to change that with the acquisition of Good, which has long sold a competing BES-style product for managing non-BlackBerry devices.
Good has a complicated history. Founded in 2000 as SpringThings, it was acquired by Motorola in 2006 and later sold to email provider Visto in 2009. Visto assumed the name Good Technology that same year. Its relationship with BlackBerry has often been tense. In 2004 the original Good settled a patent lawsuit with BlackBerry Limited (formerly known as Research in Motion) by agreeing to license technology from it.
For BlackBerry, this acquisition represents a shift back toward its core value: secure mobile communications for large organizations. For years BES has been the main reason to stick with the company’s devices over iPhones or Android devices. The acquisition suggests that even in the very likely scenario that BlackBerry never regains its footing in the smartphone market it can still make money off helping its customers keep their data secure. Of course, it begs the question constantly being asked of BlackBerry: Is it too late for a rebound?
In 2007, before the launch of the iPhone, BlackBerry was the king of corporate smartphones and was even beginning to branch out into the consumer market. But the company has struggled in recent years as Android and iOS found their way into large organizations, either through corporate purchases our through “bring your own device” programs that allow employees to use their personal phones and tablets for work. Meanwhile, developing for BlackBerry has been notoriously difficult, so third-party software vendors focused on building applications for iOS and Android, leaving BlackBerry’s app store a barren wasteland.
The company missed several opportunities to branch out into selling software and services for other operating systems. In 2011, for example, it acquired contact management software maker Gist and cult-favorite scheduling app maker Tungle.me. But instead of releasing BlackBerry branded apps for multiple platforms, thus expanding BlackBerry’s reach to other customers, it brought the Gist and Tungle.me teams’ efforts inside its own platform, making them available only to BlackBerry owners.
By the time BlackBerry finally started offering BlackBerry Messenger on other devices in 2013, it was too little too late. The company has since scrambled to get its mojo back with the launch of the BlackBerry Classic, a throwback to its glory days that has been well received by gadget reviewers. But based on IDC’s smartphone market share numbers, the Classic hasn’t saved the company from its ever declining marketshare. BlackBerry’s real salvation may come from the acquisition of Good, which boasts 6,200 customers, including more than half of the Fortune 100. If it handles this transition right, BlackBerry may finally be able to bring corporate customers—its former bread and butter—back to the table, even if they’re using another company’s devices.