Google's Latest Acquisition Is a Nail in BlackBerry's Coffin

Following a good start to the week, U.S. stocks are down on Tuesday morning, with the benchmark S&P 500 and the narrower Dow Jones Industrial Average (DJINDICES: ^DJI  ) falling 0.28% and 0.35%, respectively, at 10:15 a.m. EDT. In company-specific news, search wizard Google (NASDAQ: GOOG  ) (NASDAQ: GOOGL  ) has acquired technology start-up Divide, in a deal that contributes to the momentum of "bring your own device" -- companies allowing workers to use their personal mobile devices for business purposes. Google's drive to bring business users onto Android devices further encroaches into territory that was once the preserve of BlackBerry (NASDAQ: BBRY  ) .

Founded in 2010 by three former Morgan Stanley technology executives, Divide provides a workspace and applications that enable users to compartmentalize business and personal data, "including government-grade encryption." Strictly speaking, "government-grade" isn't a technical term -- not all government agencies require the same encryption standards (think Department of Education versus the National Security Agency). Still, investment bank information technology executives ought to be well versed in data security, as banks tend to be relatively paranoid about the inviolability of their data.

On that note, I would not necessarily have thought of Morgan Stanley as a technology incubator, but when you consider the legions of IT workers that financial institutions employ, it's surprising that this phenomenon isn't more prominent (perhaps the generous pay of IT staff at investment banks acts as a disincentive to striking out on one's own). Indeed, Divide co-founder and Chief Operating Officer Alexander Trewby, who was formerly vice president of mobile development at Morgan Stanley, has referred to his onetime employer a "software house masquerading as an investment bank." Divide CEO Andrew Toy specialized in "mobile-video delivery as well as fixed-mobile convergence telephony" at Morgan Stanley -- who'd have thought?

Divide exists to facilitate bring your own device, or BYOD; as the company explains on its website, it "launched with the belief that BYOD was going to dramatically alter the IT landscape and usher in a new wave of mobility. The company was right..." Too right! Users don't want to juggle multiple devices for different purposes, which poses genuine challenges for corporate IT departments that wish to accommodate them.

Adding Divide's tools to the Android platform enables Google to tighten up its offering to these departments in order to displace BlackBerry devices, and to compete with Apple, too. Nevertheless, a Google spokesman told The Wall Street Journal that Divide will continue to support iOS devices.

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  • Report this Comment On May 20, 2014, at 5:05 PM, xxBURK wrote:

    BlackBerry has more enterprise clients then the big three combined. They just signed 800,000 new clients to BES10 recently. It's going to be really difficult for any company to offer anywhere near the flexibility or security of BlackBerry. This is one area the media can't continue the smoke and mirrors act. If they do, they are not reputable.

  • Report this Comment On May 23, 2014, at 10:46 PM, melegross wrote:

    xxBURK, what are you talking about? That number, assuming it's even accurate, refers to individual users, not clients, as in separate organizations. You should know that Blackberry sold only 1.1 million phones worldwide last quarter. Along with that smaller number are fewer users overall of their software.

    More organization are dropping them than are picking them up.

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