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Summary

On September 4th, 2015, BlackBerry entered into a definitive agreement to acquire enterprise mobility management (EMM) software specialist Good Technology for $425m. The deal is expected to close in November 2015. With around $2bn in the bank, BlackBerry is betting big on this acquisition. The company is refocusing its business toward software and services with the aim of staying afloat and relevant in the enterprise market.

BlackBerry and Good combined can be a powerful force, but the integration needs to happen fast

As BlackBerry's hardware business continues to struggle in the face of enterprises increasingly providing their employees with iOS and Android devices instead of BlackBerrys, BlackBerry has been concentrating on its strengths in mobile security and management software as its means of recovery. It has provided cross-platform management features for several years now. However, it has struggled to make a major impact in the fast-growing EMM software market. We predict that market will be worth around $10bn by 2019, and BlackBerry wants to take a big slice – indeed it needs to in order to survive, and this may be the point at which it decides to finally cease trying altogether in the hardware market and focus all its energy on software and services.

Good has 6,200 enterprise customers and is one of the most well-established EMM vendors, which will provide an instantaneous boost for BlackBerry. And on the face of it, the history of the two firms suggests that this will be a "Good" fit – pun intended. Both have strong capabilities and reputations around secure mobility and both have a strong base in the financial services and government sectors. Good brings particular features around containerization and a healthy ecosystem of secure productivity apps on the Good Dynamics store that should appeal to BlackBerry users. BlackBerry brings its established relationships with telcos globally – an important channel to enterprise customers. BlackBerry also sees this as a future-proof acquisition, a platform that will equally be able to manage the explosion of Internet of Things devices in the coming years.

From Good's point of view, this can also be seen as a graceful and profitable exit – it has gathered over $300m in investment but also had a well-documented struggle to reach an IPO over the last couple of years. It now has the chance to join forces with another major brand in the mobility space and make a push for the growth that is needed to compete at the top end of the EMM space, which, following a period of consolidation, is now becoming dominated by software heavyweights including VMware, Citrix, Microsoft, IBM, and SAP. This is also where the risk lies: the integration of the two firms now has to happen fast, or they risk confusing and losing customers to the competition. BlackBerry needs to move quickly to demonstrate to the world exactly how Good adds to its value proposition, and why businesses should trust it with their mobile strategy.

Appendix

Further reading

Ovum Decision Matrix: Selecting an Enterprise Mobility Management Solution, 2014–15, IT0021-000023 (September 2014)

"Enterprise mobility management software market expected to keep growing apace over the next five years," IT0021-000103 (August 2015)

Author

Richard Absalom, Principal Analyst, Enterprise Mobility and Productivity

richard.absalom@ovum.com

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