BlackBerry buys Good, exposing MDM weakness

The surprise purchase shows that BlackBerry's BES has been a market failure, but Good isn't doing so well either

In a shocker this morning, struggling BlackBerry bought the oldest surviving mobile device management (MDM) company, Good Technology, for $425 million. The move will help BlackBerry obtain sorely needed revenues (about $160 million per year, BlackBerry says).

But it also indicates that BlackBerry's crown jewel, BlackBerry Enterprise Service (BES) 12, has been flopping in the market. Moreover, the acquisition highlights that the mobile market isn't so big, given that Good is is the granddaddy of MDM, established in 1996, and remains one of the top three providers along with MobileIron and VMware's AirWatch.

BlackBerry has been trying for several years to regain relevance. Its BlackBerry 10 smartphones have been rejected by users and IT alike, though they are technically superior to the previous BlackBerry 7 devices.

Seeing the writing on the wall, BlackBerry released BES10, a reinvention its BlackBerry management server to manage non-BlackBerry devices such as those running iOS, Android, and Windows. Last year's BES12 made the product better.

BlackBerry also opened up its BES APIs to third-party management tools, so they could manage BlackBerry devices, in hopes that BlackBerry device sales might increase as a result of wider support. It agreed to work with Samsung on the Knox technology for secure Android containers. It's also bought many small mobile security firms, including WatchDox, SecuSmart, and Movirtu.

But BES was the crown jewel of the BlackBerry strategy, meant to be the hub of a suite of cross-platform management and security capabilities that would form the core of BlackBerry's revenues. By buying Good, BlackBerry has admitted that BES hasn't taken hold in the market. That certainly coincides with what I hear form analysts and IT managers. Thus, the move makes sense, even if it is out of desperation.

More surprising is that Good was for sale. It's the original MDM provider and has deep connections to government agencies and large enterprises, especially those in sensitive industries such as defense -- a natural fit for BlackBerry's historic strengths. It used to be that companies had BES for BlackBerrys and Good for anything else, though not so much today.

The low price BlackBerry paid for Good suggests that having those large customers didn't translate into large revenues, an issue that has implications for the entire mobile management market, not only Good. Not long ago, Good was making moves to expand beyond its technology core, such as its own deal with Samsung over Knox.

A couple years ago, there were about 100 mobile management providers. Many have faded and some have been acquired, with fewer than 10 left that matter: Good, IBM, Microsoft, MobileIron, and VMware for sure -- plus maybe Boxtone, CA, Citrix, and Soti.

As desktop management and mobile management merge, that list narrows quickly to Microsoft, MobileIron, and VMware, with BlackBerry, CA, and IBM trying to join their ranks.

Buying Good is a good (ahem) move for BlackBerry. But mobile management remains a treacherous market and BlackBerry will need to do much more to succeed.

Copyright © 2015 IDG Communications, Inc.

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