Is BlackBerry's Enterprise Segment Poised to Rebound?
The investing community has been generally pessimistic about BlackBerry's growth prospects. Slowing sales and its inability to snatch a meaningful share from Google's Android and Microsoft's Windows Phone have collectively disappointed investors. Amid this speculative environment, however, most investors are overlooking the fact that BlackBerry's enterprise service segment is set to rebound.
Recipe for growth
Growth in the enterprise segment is generally determined by key factors such as OS flexibility, security, frequency of updates, and aesthetic appeal.
Google, for instance, recently acquired Divide -- a software player that equips Android and iOS devices with enterprise scale functionality. Its app creates separate work environments -- personal and professional -- on the aforementioned software platforms while maintaining device security.
Microsoft, on the other hand, has no such enterprise functionality available for its Windows Phone 8.1-based retail devices. The software giant, however, unveiled a developer's preview last month, aiming to link its Enterprise Mobility Suite across all of its platforms, including Windows Phone 8.1 OS.
BlackBerry, unfortunately, has made no efforts to create an entry barrier for such offerings over the last year. However, the Canadian smartphone giant has announced the development of BlackBerry Enterprise Server 12 platform, or BES12, which is due for release this year and appears to be an interesting upgrade.
It's worth noting that BlackBerry's OS6- and 7-based devices currently run on BES5, but not on BES10. Its OS10 devices, however, support both BES5 and BES10 platforms.
The mutually exclusive nature of its enterprise servers is currently forcing the hand of most companies to stick to either one of the platforms, or to leave BlackBerry altogether -- one of the main reasons behind BlackBerry's decline.
BlackBerry OS7 and earlier
Number of devices (present)
BlackBerry's BES12, however, fixes this problem. As announced in February, the Canadian smartphone vendor's latest enterprise platform will support both BES5 and BES10-based devices. The company will also provide free migration to BES10 in order to lure more businesses into buying its OS10 devices.
This essentially means that large corporations can reward their top and mid-tier employees with OS10- and OS7-based devices, respectively, without needing a separate servers to run older devices -- something that wasn't possible earlier. This strategic move adds flexibility for enterprise clients.
Stacking up against competition
Investors should note that BlackBerry's BES10 already supports Android and iOS platforms -- similar to Google's Divide. With an upgrade to BES12, the list of compatible devices will only expand. The eagerly awaited launch of BlackBerry's Q20 and Z3 will further broaden its product portfolio.
For enterprise clients, there won't much incentive to pick Google's Divide over the tried-and-tested BES.
BlackBerry: Year-On-Year Change
Mobile-Device-Management market share
Revenue from enterprise services
In addition, research conducted by Strategy Analytics this month revealed that BES10 is currently the most economical multi-platform enterprise mobility solution, based on a five-year ownership period. If the subscription of its highly flexible BES12 platform is priced similarly, the enterprise community may again begin to shower its love on the Canadian smartphone giant.
Microsoft and Google, will have to differentiate their offerings and move their product to market quickly in order to compete with BlackBerry's upcoming BES12.
Foolish final thoughts
When it comes to security and reliability, enterprise clients generally pursue tried-and-tested and reputable solutions. For this reason, BlackBerry's highly flexible BES12 appears well-positioned to dominate in the segment. Investors should keep a close watch on its subscription pricing -- something that will determine its rate of adoption.
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The article Is BlackBerry's Enterprise Segment Poised to Rebound? originally appeared on Fool.com.Piyush Arora has no position in any stocks mentioned. The Motley Fool recommends Google (C shares). The Motley Fool owns shares of Google (C shares) and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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