In the process of reinventing itself, the Canadian smartphone giant BlackBerry (NASDAQ:BBRY) is now looking to acquire a German anti-eavesdropping software maker, Secusmart. BlackBerry, whose global smartphone market share has dropped below 1%, is trying to shift focus from hardware to software. John Chen, BlackBerry CEO, wants to use the company’s security offerings to boost the smartphone adoption and primarily wants to cater to high profile government agencies and enterprise buyers. Let’s take a look at the details of the deal and how BlackBerry stands to benefit from this.
A Little About The Target and The Deal
Secusmart is a 2007 startup focusing on the encryption needs of various corporate and government agencies. The company provides highly secured voice and data encryption and anti-eavesdropping solutions that allow the users to use their smart devices without worrying about being hacked.
- Warning! GuruFocus has detected 3 Warning Signs with BBRY. Click here to check it out.
- BBRY 15-Year Financial Data
- The intrinsic value of BBRY
- Peter Lynch Chart of BBRY
BlackBerry came out with its plans to acquire the German company on Tuesday. So far the terms of the deal remain undisclosed and are subject to regulatory approvals. According to a section of analysts following the industry, the deal might face some headwinds. The German government t will look into the dynamics of the deal and how all that might affect Germany. The focus of the analysis will be to see if the deal will compromise Germany’s security. If that turns out to be the situation, the government can very well oppose and stop the deal from being carried out.
What BlackBerry Has To Gain?
John Chen is pretty excited about the deal as he feels the acquisition will provide BlackBerry a significant boost to emerge as a distinguished player in the enterprise security space. Even industry experts and analysts seem to agree to him, believing this to be a move that will position the company as a global power in combating against eavesdropping and data theft.
This won’t be the first time that these two companies will be working together. BlackBerry and Secusmart have a long standing history which has met even the most demanding security requirements. Secusmart’s SecuSUITE application has been used by several top notch government agencies, such as Germany’s Federal Office for Information Security, in their BlackBerry devices. The combination has provided the highest levels of security to Germany’s public officials, and is considered to be a very successful partnership.
In the words of John Chen, “We are always improving our security solutions to keep up with the growing complexity of enterprise mobility, with devices being used for more critical tasks and to store more critical information, and security attacks becoming more sophisticated. The acquisition of Secusmart underscores our focus on addressing growing security costs and threats ranging from individual privacy to national security.” Apart from this, the company is also looking at a few other acquisitions in the security software space.
John intends to incorporate the expertise of Secusmart into BlackBerry offerings, thus raising the level of security it offers. This will bode well for the company that intends to pull off a turn around. John doesn’t want BlackBerry to compete in the consumer electronics space beside Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG) and their likes. Instead he wishes to build the company in such a way that it’s able to cater to all kinds of security needs to a modern day organization.
BlackBerry’s decision to acquire Secusmart seems to be a logical one, something that will extend its capabilities. The move comes at a critical juncture when many are questioning BlackBerry’s ability to do justice to its investors. John is banking hugely on the company’s ability to emerge as the leading security solutions provider and the German target will surely provide a huge support to his relentless efforts.