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BlackBerry’s new enterprise security platform puts it back in the game

BlackBerry Playbook
BlackBerry Playbook
BlackBerry CEO John Chen

For years it has been the symbol of the uncool. The dad-bod of the mobile world. The Nickelback of the smartphone space. But now, it seems, BlackBerry has a direction for the future that could rival its considerable past.

BlackBerry Thursday unveiled a new platform called BlackBerry Secure that is designed to provide security for the Enterprise of Things (if you’re not keeping up, that’s a hip new moniker for businesses in the Internet of Things). It’s a decision that could open up a ton of runway for the Canadian company considering the stratospheric rise in connected devices worldwide, and the presumably escalating reward for hacking those devices.

The move into the EoT space, of course, has been a long time in coming and will integrate aspects of recent BlackBerry acquisitions, including Good Technology, WatchDox, AtHoc and Encription.

BlackBerry boss John Chen says this decision keep BlackBerry firmly in its wheelhouse.

“Businesses must be able to confidentially and reliably transmit sensitive data between endpoints to keep people, information and goods safe,” says Chen. “BlackBerry is uniquely qualified to address this emerging market now because of our deep experience, industry leadership and ongoing product innovation that addresses future business needs.”

So what of its phone business and the legions of “CrackBerry” addicts. Those days are winding down. Sorta.

In September, BlackBerry announced it would stop producing its own phones and instead focus on software and licensing the BlackBerry brand out to other companies to put on to the devices they build. For those who can’t get used to the idea of losing an old friend, Chen has promised one more phone with a physical keyboard.

But the writing is one the wall, if it wasn’t before. The smart phone business has gone in two directions. Apple is the only company of scale that can command a premium for its devices, the rest of the market has been racing to the bottom, grinding the margins down to nearly nothing. It’s not a place Chen wanted to take BlackBerry to die.

So can the “new” BlackBerry survive without hardware? In a word, yes. In 2013, to illustrate just how long this debate has been going on, then Cormark analyst Richard Tse detailed how BlackBerry could immediately get to gross margins of 77 per cent. Back then, the analyst estimated that the company’s hardware-only margins were approximately -25 per cent, causing a $150-million drag on gross marginsin one particular quarter. If these margins simply moved to zero, noted Tse, the company’s overall gross margins would have been 46%. But with absolutely no revenue from hardware whatsoever the margins would have moved 77 per cent. By comparison, Apple’s gross margins have hovered around the 40 per cent mark for years.

The EoT space, meanwhile, is a place where opportunity seems to abound. Computerworld’s Jack Gold says its impact will be considerable.

“EoT will have a profound effect on an organization’s infrastructure, including its network connectivity, VPN, identity access management, security infrastructure and management functions,” says Gold. “Further, it will have a major impact on mission-critical corporate systems like data storage and access, databases, enterprise back-office tools (e.g., ERP, CRM), data analysis and business information systems and corporate governance, to name but a few. The vast amount of data types and content created, amplified by the sheer number of transactions, will make EoT a massive undertaking.”

For the first time in a long time it seems like BlackBerry has the will and energy to tackle a “massive undertaking”, provided the end result isn’t tucked into belt clip holding up a pair of Dockers.

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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