Will BlackBerry's MDM aspirations quash device business?

BlackBerry has been trying hard to reinvent itself as a mobile device management provider. The acquisition of Good Technology represents its boldest move yet, but will it pay off?

For the past two years, BlackBerry CEO John Chen has been trying to shift the company's primary focus from hardware to software.

In its results for the first quarter of 2016, BlackBerry posted software and technology licensing revenue of $137m -- a 150% increase over the same quarter in 2015.

BlackBerry signed 2,600 enterprise customers in the quarter, claiming that approximately 45% of those deals were for cross-platform licences.

But the revenue breakdown for the quarter shows that approximately 40% was for hardware and 38% for services, whereas software and technology licensing only accounted for 21% of revenue.

The $426m purchase of Good Technology bolsters the size of BlackBerry's enterprise customer base, while also giving it much-needed expertise in securing Apple devices, according to industry watchers.

More than 6,200 organisations use technology from Good, including more than half of the Fortune 100 companies, from commercial banks and aerospace and defence firms to healthcare, manufacturing and retail businesses.

Growing MDM footprint

Writing on the Seeking Alpha blogging site, the principal analyst and CIO of Orange Peel Investments, Scott Tzu, noted: "The good news is that BBRY, even after acquiring Good, is going to continue to be cash flow positive and be in the market to make future acquisitions necessary. Good's exposure to all different platforms continues to put BBRY in an attractive space in mobile security."

By taking Good on board, Chen has taken out one of BlackBerry's main competitors, leaving MobileIron as its main independent mobile device management (MDM) rival. Another company selling MDM is AirWatch, which is now owned by VMware and Citrix, with its Zenprise product.

But can the $426m acquisition of Good Technology truly boost BlackBerry's MDM capabilities?  

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The purchase of Good Technology follows on from its acquisition of WatchDox earlier in 2015 and last year's acquisition of Secusmart.

WatchDox provides document synchronisation, sharing and management on BlackBerry devices, while Secusmart is aimed at providing government users with anti-snooping technology.

Generally, BlackBerry's MDM relies on its on-premise BlackBerry Enterprise Server (BES12), but it recently begun offering cloud-based MDM through BES12 Cloud.  

"In the latest version of BES12 Cloud, we're expanding multi-OS management capabilities to support customers looking to run mobile devices across a range of deployment models, from BYOD [bring your own device] to Cope [corporate-owned, personally-enabled]," wrote Jeff Murphy, senior product marketing manager for BlackBerry's enterprise mobility management and ID and access portfolio, in a blog post.

BlackBerry has been fleshing out its mobile device management strategy. In August, the company added support for Samsung Knox and Apple Device Enrolment to its cloud-based MDM service.

Earlier in 2015, BlackBerry announced support for Android for Work (AfW), which enables platform-level separation of business and personal data, and allows any application to run securely in the work side of the device without the need for application wrapping.

BlackBerry needs to expand device support

According to a report from analyst Info-Tech, BlackBerry remains an emerging player in the mobile device management market, best suited to managing BlackBerry devices in the enterprise. So Good represents a way for BlackBerry to extend its reach outside of its traditional strengths with MDM for BlackBerry devices through BES12.

Regarding Good Technology, Info-Tech's Vendor landscape: Mobile device management suites report stated: "While the company is not known for it, Good offers core MDM at a reasonable price. However, Good's main draw is its pricier high-security products. Highly regulated or security-conscious industries should consider Good."

The MDM in Good Technology is based on the containerisation of applications, separating secure enterprise data and apps on a mobile device from the rest of the data. According to Info-Tech, this approach may prove troublesome for some users. "The container approach can be a hassle for users, especially when the container replaces native device capabilities that users are accustomed to. While this increases cross-platform security, the approach can eliminate some of the advantages of employees using their own preferred devices," it warned in the report.

BlackBerry's CEO recognises the need to establish the company's BES product as the cornerstone of a multi-device MDM strategy. But this strategy puts him at odds with the device side of the business and those in the industry who regard BlackBerry as a failing mobile device company, rather than an aspiring MDM provider.

In a video interview for the Silicon Valley business and technology forum, Churchill Club, in August, Chen said: "We were able to convince Samsung to use our [BES] server to manage Knox devices, which is a direct competitor to my high-end regulated industry phone business. It drives my handset people crazy. A lot of the time we have deals where my software sales guys are pitching BES with the Samsung Knox device. We did the same thing with Black Phone at Boeing [an Android device managed by BES]."

It is hard to see how BlackBerry handsets can remain viable as standalone devices, but combined with BES and the technology Good will add, the company could have a strong foundation to reinvent itself as a major MDM force.

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