|BlackBerry and Samsung team up in the most unlikely of partnerships to deliver more secure mobility solutions to enterprise clients.|
BlackBerry has a pleasant surprise for Android users: a partnership with Samsung will bring better Android security by coupling its BlackBerry Enterprise Server (BES) 12 mobility management platform with Samsung's business-centered Knox security system.
In a move that raised eyebrows, BlackBerry CEO John Chen announced at the company's enterprise event in San Francisco on Nov. 13 that it is working with Samsung, the very company that brought the Canadian smartphone maker to its knees, to deliver more secure mobility solutions for enterprises running on Android.
The partnership will provide Samsung's business clients using its Knox suite of secure work applications with an additional layer of security by having Knox run on BlackBerry's BES12 server.
"People probably didn't expect to see these two companies on the same stage, at least not willingly," says John Sims, BlackBerry's head of enterprises services. "We need to be able to provide a breadth of choices and do that with companies at the highest level."
Investors seem to be nodding in approval at BlackBerry's announcement. Following the event, BlackBerry shares shot up by 7 percent to $12.06 apiece, the highest since June 2013.
Analyst Anil Doradla of William Blair & Co. says while BlackBerry still has a long way to go to become profitable again, Chen is doing all the right things to steer his company into that direction.
"We know where we are today, we know where he wants to get to. 'How do we get there?' is the key question," Doradla says. "They're totally not out of the woods yet but they are moving in the right direction."
BlackBerry's embattled smartphone business so far has yet to make a comeback with new offerings such as the BlackBerry Passport and BlackBerry Classic looking to be promising, but BlackBerry's strongest cards are in its enterprise mobility management platform.
With the partnership, Samsung could give BlackBerry's software services a more extensive reach to Samsung Galaxy users and bring the company some much-needed revenue.
Samsung, too, could stand to benefit from the deal. Knox has been widely lauded by enterprise customers and even received the thumbs-up from the Pentagon to start marketing the platform to government agencies, although reports have panned the system for weak encryption.
With BlackBerry's stellar reputation for security, however, the partnership should help Samsung push itself further into the enterprise mobility marketplace.
In a statement, BlackBerry said enterprise clients will be inclined to look to more secure mobility management solutions as 76 percent of people fear legal liability and costly lawsuits arising from lack of security.
BlackBerry has yet to announce pricing for the integrated platform, which will roll out sometime next year, BlackBerry says.
The move is all part of Chen's strategy to turn BlackBerry's fortunes around by going back to the company's roots, which are deeply entrenched in the enterprise and government. In an interview with Fortune, Chen says BlackBerry's development teams are guided by four principles: security, privacy, productivity and collaboration.
"The overall returning to the roots is much beyond the device," he says. "The Classic is an important part but it's not the only part. Very early in my career here, I talked about re-pivoting back to the enterprise. It implies not only the devices but also the enterprise using our software and server as the backbone."
Chen says he only has had six to nine months to implement his turnaround strategy and, while the company has gained some traction, there is still a lot of work to be done. He says that the return-to-roots strategy not only benefits the company's earnings but also helps boost worker morale, which isn't so good after BlackBerry's massive layoffs as part of cost-cutting.
"By returning to the roots they not only feel comfortable, but they surely understand it," Chen says. "You can't keep their morale high if they keep looking over their shoulder and wondering if there will be layoffs. I took the bold statement of telling the company that we're done with layoffs."
"I don't want to give the impression that morale's great," he adds. "But it will be great. I expect the crossover point to happen next year, and we will turn around and make ourselves profitable."