BlackBerry Makes Buy In Hopes of Staying Competitive in Crowded MDM Market

Things weren't going so good for mobile device management vendor Good Technology, which late Friday agreed to be acquired by rival BlackBerry for $425 million. While BlackBerry may be best known for its rapidly fading mobile phone business, the company also has a formidable mobile device management platform, deemed by many federal government agencies as the most secure. But both the BlackBerry Enterprise Server and Good's MDM suite continue to face pressure from larger rivals including Citrix, Microsoft, VMware's AirWatch unit and IBM, among others. By taking out Good, MobileIron is the last of the large independent mobile device management suppliers.

It appeared Good Technology was flying high last year. The company had a large customer and developer event (with 5,000 in attendance) in New York in June 2014 when the company had filed for an initial public offering. Good Technology's CEO Christy Wyatt at the time said in an interview that she wasn't concerned about being squeezed out by larger vendors such as IBM, which acquired FiberLink, supplier of the MaaS360 suite, VMware's $1.54 billion acquisition of market leader AirWatch (which was the company's largest deal ever) and Microsoft's move into the market with the Enterprise Mobility Suite.

"We have a very strong relationship with Microsoft, but as with any one of these providers, there's going to be parts of the company that want to do MDM and there will be parts of the company that want to partner with Good," Wyatt said at the time. Analysts last summer had valued both Good Technology and MobileIron at $1 billion each, though at least Good apparently was never able to cash in at that level.

The July 2014 cover story of Redmond magazine raised the question: can Microsoft disrupt the mobile device management business with its new EMS, which it had just announced at the time? With much fanfare, Microsoft Corporate VP Brad Anderson argued (and continues to do so), that organizations won't need third-party MDM suites if they use EMS, which includes Azure Active Directory, Intune and Azure Rights Management. "It all begins with identity," Anderson said at the time of the launch, pointing to the move to bring Active Directory to Azure. It's apparently a message that rival VMware believes as well as it launched a standalone version of its VMware Identity Management at last week's VMworld conference.

Perhaps the big players are stacking the deck against smaller ones such as Good and BlackBerry. Both are hoping by joining forces they will become a more formidable competitor. "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," said BlackBerry executive chairman and CEO John Chen. "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. 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 has 6,200 customers and claims it has half of the companies in the Fortune 100 including all of the top commercial banks, aerospace and defense firms and key players in other large industries such as healthcare, manufacturing and retail, BlackBerry said in its announcement. Yet Wyatt reportedly told analysts last week that Good was not profitable and it was apparently burning through cash. According to a report in The Wall Street Journal, Good only had seven months of operating cash as of last summer.

Meanwhile look for Citrix, IBM, Microsoft and VMware, among others to continue to put the squeeze on smaller suppliers of mobility management software. Unless they can offer capabilities that are truly differentiated, the big boys are going to soon own the MDM market.

Posted by Jeffrey Schwartz on 09/08/2015 at 10:15 AM