BlackBerry spends $425M on secure iOS solutions provider Good Technology

Posted:
in General Discussion edited September 2015
BlackBerry on Friday announced the acquisition of mobility services firm Good Technology in what appears to be an attempt at protecting its position in secure mobile enterprise solutions before declining into complete irrelevancy.




As part of BlackBerry, Good will complement and enhance existing BlackBerry Enterprise Server products that form the basis of BlackBerry's core secure mobile communications business, the company said in a press release.

Current implementations of BES serve enterprise customers using BlackBerry devices, as well as those running Apple's iOS and Google's Android since 2011, and Good is expected to expand compatibility even further. Specifically, the firm will offer the same secure applications and containerization products already in use at thousands of businesses, including more than half of the Fortune 100.

In purchasing Good, it looks as though BlackBerry is shoring up its backend product offerings against a potential collapse in hardware sales. Before iPhone, BlackBerry was the clear leader in mobile messaging technology but saw its position eroded as the commercial successes of iPhone and Android devices ate into enterprise marketshare. Tellingly, Good counts all of the Fortune 100 commercial banks, aerospace and defense firms, and leaders across healthcare, manufacturing and retail as clients.

"By acquiring Good, BlackBerry will better solve one of the biggest struggles for CIOs today, especially those in regulated industries: securely managing devices across any platform. By providing even stronger cross-platform capabilities our customers will not have to compromise on their choice of operating systems, deployment models or any level of privacy and security," said John Chen, BlackBerry Executive Chairman and CEO. "Like BlackBerry, Good has a very strong presence in enterprises and governments around the world and, with this transaction, BlackBerry will enhance its sales and distribution capabilities and further grow its enterprise software revenue stream."

Good's customer base has long been dominated by devices running Apple's iOS. The company noted in its most recent quarterly Mobility Index Report that iOS accounted for 64 percent of all activations on its network.
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Comments

  • Reply 1 of 43
    Wha?? The company I work for used Good exclusively for mobile connectivity. And the majority of people use it on iPhone. This will be fun.
  • Reply 2 of 43

    I'll admit I am not a financial guy, but how does a company that has a market cap of 3.85B down ~ 8% in the last year spend $425M on this? 

  • Reply 3 of 43
    h2ph2p Posts: 264member

    IMHO this is a good move. Why not: Bolster what's left of BB Hardware customers – and through the back door – become an iPhone/Android developer. This way it doesn't look like BB is changing into a software company while they transition into a software company (with a bit of hardware ala MS). If (when) BB passes away, they will still have some jobs left to support the company and the employees. BB going under won't be a Total Lose! Whatchathink?

  • Reply 4 of 43
    melgrossmelgross Posts: 31,697member
    I hope this works out for them. Chen expects it will take between one and two years to integrate their BES product with that of Good. One year might work, but two is a long time. The problem is that Blackberry isn't good, no pun intended, in doing this. It took a full three years to have BB10 and BES 10 completely ready. They don't have that much time with this.

    Meanwhile, they intend to sell both products. I've a feeling that soon, we will see an announcement that they will discontinue hardware.
  • Reply 5 of 43
    rmb0037 wrote: »
    Wha?? The company I work for used Good exclusively for mobile connectivity. And the majority of people use it on iPhone. This will be fun.

    I don't think that's an issue, but the plan. I think BB is doing what IBM did. They are moving to the back-end of technology field. It's not as glamorous and their mind-share will never be what it once was with the Blackberry as the pinnacle of the pager-phone, but this could help them dig out a solid niche that will allow them to both grow and be profitable again.

    kent909 wrote: »
    I'll admit I am not a financial guy, but how does a company that has a market cap of 3.85B down ~ 8% in the last year spend $425M on this? 

    Depends on the cash they have on hand and/or using their assets as leverage for a loan. Let's remember that Apple bought NeXT for $429 million and I think their market cap at the time of the sale was even less than BB's in right now. I'm thinking it was about $500 million less, at $3.3 billion. Hopefully someone will verify that or have some better data for you. It's only in retrospect that we look at that purchase and say, "Of course that made since. Look where Apple is today."
  • Reply 6 of 43
    melgrossmelgross Posts: 31,697member
    kent909 wrote: »
    I'll admit I am not a financial guy, but how does a company that has a market cap of 3.85B down ~ 8% in the last year spend $425M on this? 

    It's a bit complicated for them. They have enough cash. But, that's complicated as well.

    So, a couple of years ago, right after a failed attempt to sell the company, and what appears to have been a fake offer to buy the company by Fairfax, a Canadian investment firm, whose CEO made large investments in Blackberry over the years, and which investments were, and are, under water, Blackberry issued $2 billion in debentures intended directly for Fairfax. Fairfax bought the debentures.

    So Blackberry has the value of the debentures in cash. That, plus a bit of cash from operations, minus debt, gives them enough to buy this in cash.

    However, if they intend to continue to keep producing phones, it could interfere with their intended software operations. Supposedly, they are saving money by having Hon Hai make minor modifications to a couple of cheaper Android models that will be sold as Blackberry phones in third world countries. How that is going, we don't know yet, as products from this partnership haven't yet materialized.

    Good is burning cash, which Chen says isn't a problem. I don't really believe much of what he says, as he's said a number of things since he's got there that haven't happened.

    I don't have a lot of confidence in Blackberry anymore. If sales keep dropping at the rate they've been, and Good is burning cash, how much time do they have? A problem for them is that debentures are exchangeable at any time for cash. That means that Fairfax can, at any time, require Blackberry to buy the debentures, or any portion thereof. It's something like a loan (not exactly, of course, but it can work out that way).

    How long will Fairfax go with this? They could kill the company if Watsa, the CEO of Fairfax, decides they will never make up their investment, and he decides to finally get out.

    As I said, it's complicated.
  • Reply 7 of 43
    melgross wrote: »
    Meanwhile, they intend to sell both products. I've a feeling that soon, we will see an announcement that they will discontinue hardware.

    Consumer HW or all HW?
  • Reply 8 of 43
    asdasdasdasd Posts: 5,293member
    Quote:


     protecting its position in secure mobile enterprise solutions before declining into complete irrelevancy.

     



     

     Is there any need for that kind of editorialising in the title?

  • Reply 9 of 43
    asdasdasdasd Posts: 5,293member

    Blackberry won't stop the hardware. They have their markets, just as the Mac survived at 2%. I wish them well...

  • Reply 10 of 43
    One of the few ways could easily continue to add value to it's more paranoid customers in the short term. Not a long term solution though.
  • Reply 11 of 43
    I think this is a perfect match. My corporation's IT department, probably like many others, just loves all things Blackberry and has been using Good on other mobile platforms to turn those otherwise smart devices into something resembling the blackberries of old. This should make them very happy. My only hope is that it speeds up the downward spiral so the world can finally be free of both of them.
  • Reply 12 of 43
    howmanoid wrote: »
    One of the few ways could easily continue to add value to it's more paranoid customers in the short term. Not a long term solution though.

    Why not longterm? This purchase seems like the definition of a longterm to me.

    raycr wrote: »
    I think this is a perfect match. My corporation's IT department, probably like many others, just loves all things Blackberry and has been using Good on other mobile platforms to turn those otherwise smart devices into something resembling the blackberries of old. This should make them very happy. My only hope is that it speeds up the downward spiral so the world can finally be free of both of them.

    Can you explain that? If many corporations love "all things Blackberry" and want their devices "resembling the blackberries of old" then why is iOS and Android so popular. Even Windows Phone, which didn't even get its first release until 2010 when it was to late to get any decent marketshare, has over 8x more marketshare than Blackberry's mobile OS, according to IDC's late numbers.
  • Reply 13 of 43
    dreyfus2dreyfus2 Posts: 1,070member

    The problem here is that this is yesterday's technology. Again BB is running to where the ball was ten minutes ago...

     

    Monolithic MDM solutions were the first step to manage the need to deploy, secure and maintain mobile devices in corporations. Every company with more than a few hundred phones and/or regulatory requirements has done that. We have all seen the shortcomings, the overheads, the complexities. New solutions address a lot of that by eliminating the boundary between devices. Employee X has access to the following software, access to the following file shares locally and remotely, can use the following printers etc ad inf. Wanna maintain that in BES for BB users, Good Technology for iOS and Android users, Windows Server group policies, Exchange and Sharepoint and OneDrive settings for thousands of people? No, you don't. The systems of tomorrow cover all client devices, Macs, PCs, Linux boxes, tablets, smartphones and whatever else with one GUI, one set of rules, one profile per staff member. MS is getting there, IBM is getting there.

     

    Why does that matter for BB? Because they have no experience at all in device management outside of phones. And whenever this integration of BES and GT is done – 2 years if they meet their first deadline in a decade – it will be irrelevant again. The Next purchase helped Apple to define the future, the GT purchase allows BB to chase yesterday.

  • Reply 14 of 43
    Quote:
    Originally Posted by asdasd View Post

     

     Is there any need for that kind of editorialising in the title?


     

    Not sure why you say that. The title simply says "BlackBerry spends $425M on secure iOS solutions provider Good Technology". I don't care if there's editorializing in the article or forums.

  • Reply 15 of 43
    solipsismy wrote: »
    Why not longterm? This purchase seems like the definition of a longterm to me.
    Can you explain that? If many corporations love "all things Blackberry" and want their devices "resembling the blackberries of old" then why is iOS and Android so popular. Even Windows Phone, which didn't even get its first release until 2010 when it was to late to get any decent marketshare, has over 8x more marketshare than Blackberry's mobile OS, according to IDC's late numbers.
    I think if those IT departments had their way they'd only support blackberries. They are being forced to accept iOS and Android because that's what's in the marketplace.

    Don't get me wrong, I'm sure there are plenty of Fortune 500 companies using iOS and Android to their full potential. I'm equally sure that there are some that are quite content to hobble these devices to where they are "manageable".
  • Reply 16 of 43
    raycr wrote: »
    I think if those IT departments had their way they'd only support blackberries.

    Only because it would make their jobs much easier to not have to support a modern, mature mobile OS.
    They are being forced to accept iOS and Android because that's what's in the marketplace.

    I assume you're being hyperbolic with the use of forced here. Sure, the staff in all IT departments have to listen to the CTO, CEO, or whomever their bosses are. You want to call that forced or think that some executive says "no Blackberries" because his daughter bought an iPhone and loves it, then you're wrong. Have you seen the productive apps that are available for companies with iOS? IBM alone has several. Then you have all the enterprise configuration polices that can be pushed and maintained remotely, as well as the ability for companies to build rich, modern iOS apps internally. That's why the companies want a modern system, and not some early-2000s era Blackberry.
  • Reply 17 of 43
    Good = Bad! I rather use OWA than install this virus. Maybe BB developers can improve =)
  • Reply 18 of 43
    robmrobm Posts: 1,068member
    Ah Soli you said the IBM word.
    IBM cf Blackberry.
    IBM established player in a strategic alliance with Apple.
    Blackberry recent acquirer of GT will have to work extremely hard and quickly to integrate and solidify a position against a giant who is just starting to get rolling.

    IMO - no contest. At least with what we've seen from them so far. We'll see, but I'd suspect another meltdown/bloodbath not too far away.
    But this play is almost certainly Blackberrys last chance to dance. It'll be interesting to watch this one unfold.
  • Reply 19 of 43
    It's called a Hail Mary - and it's a binary outcome.

    As Yoda once said to Luke Skywalker: "Do... or do not. There is no try..."
  • Reply 20 of 43
    richlrichl Posts: 2,213member

    I'm a bit ignorant in this area. What does Good (or BB) offer over a simple Exchange server? Better security? Increased performance?

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