BlackBerry's $500M Software Licensing Goal Drifts Further Away
October 01, 2015
By
Tara Seals, Contributing Writer
BlackBerry (News - Alert) has been through a lot of ups and downs as a company—mostly down of late, as it struggles to fill the void left by its precipitous decline as a handset-maker. More bad news is on the way: CEO John Chen has set the ambitious goal to rake in $500 million in software and licensing revenue in FY2016, but as of its FQ2, it reported just $74 million.
Worse, that’s less than what it achieved in the first quarter—so barring a major run on the once-formidable Canadian company’s IP, it will fall far short of the half-billion that it’s looking for.
BlackBerry is relying heavily on what once set its iconic mobile devices apart: enterprise security. Its Enterprise Mobility Management (EMM) business is still known as the best in the biz, comprising both a server- and a client-side aspect to locking down endpoints and managing a multivendor mobility environment, with a mix of mobile end points, operating systems, risk profiles and ownership models, including corporate owned, personally enabled (COPE) and bring your own device (BYOD).
But, the problem of course is that once a company has signed on for that, it’s a long-term relationship wherein disruption would wreak havoc. So, IT looks for stable providers with a more than halfway decent chance of being around in five, 10, 15 years. And here, BlackBerry has an image problem.
“This is a big problem for BlackBerry, a company that’s largely seen as being in decline,” the Motley Fool pointed out. “In other words, when news breaks about BlackBerry’s declining handset business, EMM customers wonder if the company’s days are numbered. That perception makes it very difficult for BlackBerry to sell its EMM solutions, no matter how well the company is able to secure mobile devices.”
Add to that the fact that BlackBerry now has competition in the space, from pure-plays like AirWatch and Mobileiron, and bigwigs like Microsoft, Oracle (News - Alert) and IBM, and it faces an uphill battle in clenching the market lead.
The Fool also noted that BlackBerry saw $137 million in software and licensing revenue for the first quarter, which would seem encouraging—except that the majority of that was due to two big-fish deals, including one with Cisco (News - Alert).
“Mr. Chen expects licensing to ‘contribute’ in the next two quarters, and is also sticking by his US$500 million goal. But shareholders should be very skeptical,” the Fool concluded.
Edited by Maurice Nagle