The announcement came as BlackBerry unveiled its new
mobile-security software—dubbed BlackBerry Enterprise Service 12, or
BES12—a key part of its plan to double revenue from software sales to
$500 million and return to profitability in its next fiscal year by
winning back corporate and government business.
BlackBerry’s
share of the global smartphone market has shrunk to a sliver, and the
Canadian company is losing ground to rivals in sales of mobile-security
software. The tie-up with Samsung, the world’s largest mobile-phone
maker, will give BlackBerry access to a larger customer base to sell
BES12, and comes as many companies seek one security solution to manage
their employees’ various mobile devices.
Samsung, meanwhile,
stands to benefit from BlackBerry’s stronger reputation for mobile
security. That could help the South Korean electronics giant accelerate
its efforts to expand in the enterprise market, where it has struggled
to gain traction.
Selling more devices to corporate customers
could also relieve some pressure on Samsung as its dominance in the
consumer market comes under attack from less-expensive handsets made by
Xiaomi Inc. and other Chinese vendors.
Samsung and BlackBerry are
often characterized as rivals in the enterprise market, but their
security technologies can be complementary. Samsung’s security platform,
Knox, comes embedded in certain Samsung Galaxy devices, allowing users
to separate personal and work data to ensure corporate security and
employee privacy. Meanwhile, BlackBerry’s technology allows companies to
remotely manage devices to prevent security breaches and data loss as
content and applications move between those devices and corporate
networks.
BES12 works on non-BlackBerry operating systems, including
Google
Inc.
’s Android, used by Samsung devices,
Apple
Inc.
’s iOS and
Microsoft
Corp.
’s Windows. That means BlackBerry can win business from sales of
the software even if business customers don’t use its devices.
The
partnership will allow both BlackBerry and Samsung to generate revenue
from companies that choose to adopt Knox-embedded Samsung devices for
their workers and want BES12 to manage these devices. BlackBerry and
Samsung will split the revenue from these sales, but the companies
haven’t disclosed that breakdown.
The deal “isn’t about one company displacing the other,”
John Sims,
head of BlackBerry’s enterprise business, said in an interview. “This is about one and one makes three.”
For
Samsung, the BlackBerry deal is the latest in a string of alliances it
has forged with enterprise players, most recently a partnership with
German software company
SAP SE
announced on Tuesday to better integrate Samsung’s range of mobile devices with SAP’s enterprise mobile offerings.
“Combined with BES12 we will offer more options for customers,”
Injong Rhee,
a Samsung senior vice president, said in a statement.
Annual
global revenue from enterprise mobility-management software are
expected to more than quadruple to $5.75 billion in 2018, driven by
greater use of mobile devices at work, a surge in mobile apps and
increased security threats, according to Radicati Group Inc., a
market-research firm.
BlackBerry, though, has been losing share
in this market. Last year, it led the enterprise mobile-management
market measured by revenue with an estimated 14.4% share, according to
International Data Corp. But rivals, including
MobileIron
Inc.,
VMware
Inc.
-owned Airwatch and
Citrix Systems
Inc.,
are eating into BlackBerry’s business.
BlackBerry wasn’t “on a growth path from 2012 to 2013” and it appears it will see declines this year, said
Stacy Crook,
an IDC analyst. Revenue could stabilize in 2015 if BES12 proves to be a hit, she added.
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