Best Analysis of BlackBerry Good Acquisition

In terms of relative valuations, BlackBerry is paying just about 2x trailing revenues for Good. In comparison, VMWare’s 2014 purchase of EMM leader AirWatch was apparently closed at a whopping 15x trailing revenue multiple.

Best Analysis of BlackBerry Good Acquisition


Good appears to be a nice strategic fit for BlackBerry’s software business, as it will help improve BlackBerry’s cross-platform EMM support and bring in a relatively large and diverse customer base, while also helping to drive incremental revenue growth. Additionally, the deal, which will be the largest acquisition in BlackBerry’s corporate history, indicates that the management remains resolute about its software-focused turnaround plan.

Good has strong expertise in multi-OS management with iOS devices accounting for 64% of its activations, followed by a broad Android and Windows customer base. This experience, combined with BlackBerry’s strength in BlackBerry 10 and Android management, should allow the company to effectively address various customers and their deployment models. Good’s success with iOS activations is very positive, given that Apple has been gaining share in the enterprise as well as the overall smartphone market.

The deal should help BlackBerry expand its customer base meaningfully. Good’s customer base includes more than 6,200 organizations, and the company is strong in verticals such as aerospace and defense, healthcare and financial services.

According to IDC, the largest vendor in 2014– AirWatch, owned by VMWare – had a market share of 11.4%, followed by Good with 9.7% and BlackBerry with a 9.5% share. [3] With the Good deal, BlackBerry has effectively absorbed a key rival and bolstered its market position, possibly making it the largest EMM vendor after the deal closes. This sort of consolidation may appear all the more important with giants such as IBM and Microsoft – with their financial muscle and stronger enterprise software ecosystems – looking to make deeper inroads into the market.

Now, the EMM software market that BlackBerry is betting on to stabilize revenues and drive growth represents a very small and relatively niche part of the broader mobile software space, with the overall market size standing at just $1.4 billion in 2014. For perspective, that’s less than half of BlackBerry’s sales over CY2014. Even if BlackBerry is able to make a big dent in this market going forward, its unlikely to mean much for its earnings or valuation upside.


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