The acquisition of Palo Alto-based Watchdox will help BlackBerry (TSX:BB, TSE:BB, Nasdaq:BBRY) in its shift away from its hardware business, says Cormark analyst Richard Tse.
This morning, BlackBerry announced it had acquired cloud based enterprise file sharing company Watchdox for a reported $70-million. The Waterloo-based company said the deal would complement BlackBerry’s Enterprise Mobility Management (EMM) portfolio, and will be available with its BlackBerry Enterprise Server.
Tse notes that Watchdox is included in the most recent Gartner Magic Quadrant for Enterprise File Synchronization and Sharing as a top visionary. He believes there is an opportunity for BlackBerry to take Watchdox’s file synchronization solution to its installed base of more than 15-million business customers.
The Cormark analyst says BlackBerry’s pivot from hardware to software is a not a stealthy one, but moves like Watchdox accelerate the process.
“As you’ve seen (by the recent quarterly results), it’s still a slow build for BlackBerry when it comes to their pivot towards software,” said Tse. “That said, moves like WatchDox continue to build on that shift which, in our view, should de-emphasize their hardware business over time. We believe WatchDox reinforces that shift towards a higher value market by rounding out what BES can do beyond just securing the hard devices.”
In a research update to clients today, Tse maintained his “Buy (Speculative)” rating and (U.S.) $14.00 one year target on BlackBerry.
Below: BlackBerry Enterprise Server explained…