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BlackBerry pins enterprise future on BES12, partnerships

BlackBerry's return to QWERTY keyboard devices and improvements to BES12 are steps in the right direction, but is it too little, too late for many IT shops that have already moved on?

Whether strong partnerships and new features in BES12 can turn around BlackBerry's fortunes remains to be seen, but it's too late for some IT pros to notice. 

BlackBerry's revenues have been cut nearly in half since last year, but that may be due to a shift away from selling devices and more toward pushing enterprise software and services.

A new version of BlackBerry Enterprise Service (BES), BlackBerry's enterprise mobility management (EMM) platform, is now available. BES12 -- the follow up to BES10 -- provides cross-platform support for mobile devices and application management for Apple iOS, Google Android and Microsoft Windows Phone 8 in addition to its own BlackBerry devices.

BlackBerry also wants to lure enterprise customers using other platforms to BES12 through several integrations. Perhaps most significant is a partnership with Samsung to manage Galaxy devices running Knox on BES12.

Starting next year, BES12 administrators can connect to Knox devices to gain the security benefits from both platforms. Those benefits include Knox's enhanced Android application security through its secure container, while BlackBerry provides secure connectivity to corporate networks through BES. Samsung and BlackBerry will also sell each other's products under the agreement. 

[BlackBerry] will partner with any of the big players and that's a matter of getting those vendors to commit to BlackBerry.
Chris HazeltonResearch director, 451 Research

The move is something of a surprise, given Samsung's efforts to bolster Knox as a BlackBerry alternative. Google will release its own secure enterprise container within Android Lollipop that includes components from Knox.

BlackBerry is also using Salesforce's customer relationship management (CRM) platform to provide an integrated EMM/CRM option for mobile customers, where Salesforce's Customer Success Platform can be managed and secured with BES12.

The partnerships are a departure for BlackBerry, said Chris Hazelton, research director for mobile and wireless at 451 Research LLC, based in New York City.

"The market is looking for capabilities to support all devices," Hazelton said. "Having a commitment to cross-platform is something I haven't really seen from BlackBerry until [now]. They realize they can't go it alone."

BlackBerry customers have mixed response

American Crane and Equipment, Corp., an overhead material handling company in Douglasville, Pa., has been a longtime BlackBerry customer and is planning an upgrade from BES10 to BES12. Although there are only four BlackBerry 10 devices in its ecosystem, BES provides the level of mobile device management support American Crane needs for its corporate-owned fleet of devices, most of which are iOS and Android.

"We went with BES because it's easy to install, reliable and you know it's going to be as secure as possible with BlackBerry and their reputation," said Denny Bono, American Crane's IT manager. "[Security] is their bread and butter, and they've done their homework on this."

During a beta test, American Crane found BES12 made improvements in installation, pushing configurations out to devices and the interface for administrators. Installation is less complicated and faster on BES12 [than on BES10], Bono said.

But not all customers remain loyal to BlackBerry.

One semiconductor supplier headquartered in the Northeast U.S. recently decommissioned its BES server and removed all of its corporate-issued BlackBerry devices. For years, the company issued BlackBerry smartphones to many employees, but found most prefer their own devices.

Over two years ago, the company established a combined bring your own device (BYOD) and corporate-issued device model with employees using iOS and Android devices.

"There were just so many iPhones and Androids out there that it did not make sense to mandate people go with the new BlackBerry device," said the company’s IT system analyst, who requested anonymity.

The company moved from BES to MobileIron Inc., for device management after deactivating approximately 100 BlackBerry devices. It no longer felt BES could meet its needs with so many non-BlackBerry devices coming on its network. MobileIron offers strong security on BYOD devices, including passcode policies, device tracking and remote wiping capabilities, the IT pro said.

After some mobile connectivity issues when it first went with MobileIron, the company is pleased with its support from MobileIron and a local reseller.

Despite the BlackBerry Classic smartphone, BES12 and new BlackBerry partnerships, these benefits aren't enough for the company to reconsider BlackBerry.

"With the huge investment [the company has] made in MobileIron, these smartphones and BYOD, it's not even an option," the IT pro said.

Device, revenue realities hit BlackBerry

The semiconductor company's move is consistent with many other enterprises that provide employees with devices. A 451 Research ChangeWave survey conducted in August of 1,544 enterprise IT decision-makers asked what smartphone they planned to buy their employees in the next quarter. Of the respondents, 19% said they planned to buy BlackBerry smartphones, down from 28% in the same survey a year ago By comparison, 75% planned to buy iPhones and 37% planned to buy Samsung smartphones.

That drop is indicative of the market's mood toward BlackBerry in the age of consumerization, but also the change in focus the company has seen under BlackBerry CEO John Chen.

"Chen doesn't have this historical loyalty to the BlackBerry device business, because he didn't build it up," Hazelton said. "Chen can pivot this company into an enterprise mobility vendor and take a long-term view without any loyalty to a specific BlackBerry product line."

Since Chen took over the reins as CEO from Thorsten Heins last year, BlackBerry has bandaged its bleeding financial losses, and the results show a reshaping of the company's overall focus.

In second-quarter financial results from fiscal year 2015, BlackBerry posted $207 million in losses compared to $965 million in losses from the same quarter last year. Revenue for the company is down, from $1.6 billion in Q2 2014 to $916 million in Q2 2015.

BlackBerry device sales are also down year-over-year, from 3.7 million devices sold in Q2 2013 to 2.1 million in Q2 2014. The percentage of company revenue from device sales has dropped from 49% to 46% in that time period as well.

With the company de-emphasizing hardware, partnerships are the key to building more business in the future.

"[BlackBerry] will partner with any of the big players and that's a matter of getting those vendors to commit to BlackBerry," Hazelton said.

Despite a difficult transition phase, the company still provides a high level of service and products for enterprises, Bono said.

"Knowing [BlackBerry] is dedicated to the enterprise world and that's where they are focusing, I don't really have any worries," he said.

Pricing for BES12 is available in Silver and Gold tiers, with Silver pricing ranging from $23 to $40 per device, per year, and Gold pricing from $72 to $90 per device, per year. Both Silver and Gold tiers include mobile device, application, email and compliance management for all devices. The Gold tier adds on secure browsing, document editing, productivity apps and containers for all devices.

The BlackBerry Classic will be available in December and can be pre-ordered now for $450.

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