Enterprise Messaging: BlackBerry Limited Steps Up to the Plate

BlackBerry is fulfilling its app plans, but competitors like Microsoft and Cotap offer competition.

Jun 27, 2014 at 11:00AM


Image by Flickr user Eduardo Woo

BlackBerry (NASDAQ:BBRY) has already announced that it will focus more on its BBM messaging app in the future, but now we have a more concrete example in its new eBBM suite. This is a business-oriented ("e" for enterprise) version of the messaging app, which comes with features like BBM Protected, an app filter creating layers of encryption that allows business workers to message each other regarding sensitive information. Users can message both inside and outside the company with this heavy-duty protection, then switch back to the normal BBM to chat with friends.

This appeals to companies that are traditionally fond of BlackBerry services, especially government agencies and large corporations with a vested interest in keeping data protected. The good news is that BlackBerry is bringing the eBBM service to other systems  like Android and iOS in the coming months. On the other hand, competitors like Microsoft (NASDAQ:MSFT) are also reaching for the enterprise messaging app pie.

Messaging takes the center stage
This new eBBM suite is a tangible result of BlackBerry's plan to move away from the phone and toward more universal services, another welcome sign on the path of BlackBerry's reinvention. The company's share price has risen from a late-May level of around $7.25 to $8.30 following the eBBM news and announcements regarding a partnership with Amazon.com .

BlackBerry, which reported its 2015 fiscal year on June 19th, beat earnings expectations with a net income of $23 million . This was positive news for investors who were betting on the company's second life. However, its foray into enterprise messaging also signals a much larger movement toward such apps. This is fueled by the habits of the modern workplace, where a rising number of new employees have grown up with their chat screens open.

Yammering away
When it comes to competing services, Microsoft is also at work building up Yammer as an all-in-one social enterprise solution. In February , a new iPad app offered additional compatibility and multiple updates integrated the service even farther with Office 365, SharePoint, and other Microsoft enterprise services. Considering this, Yammer may prove an even more direct competitor to eBBM than Yahoo!'s projects. Not only does it already exist, but Microsoft also has its own long-term relationship with the enterprise world and is more open to future acquisitions  than ever.

Microsoft is a large enough player to benefit from news as diverse as a new Azure update , a thriving Intel report, and a focused E3 conference. These factors and more have pushed Microsoft's share price beyond $41.50. While the company's latest quarter showed a 5.5% drop  in earnings per share year over year, Microsoft could well improve these figures with a successful 2014 -- and it seems ready to bet on its newly integrated enterprise services.

Enterprise on the rise
Let's not forget the smaller players that are approaching enterprise messaging. One name to watch is Cotap, created by former Yammer leaders and focused on smartphone messaging apps for the average employee. The company held a $10 million funding round  back in January and is working on more tiered services. These smaller services could prove appealing to smaller businesses and entry-level workers, allowing Cotap and others to establish themselves more firmly. Look for more successful funding rounds in the future.

New plans, new prospects
John Chen, CEO of BlackBerry, has been working to differentiate the company more clearly from market-stealing rivals like Apple and Samsung, which have played a key role in BlackBerry's dismal past decade of lost sales and failing influence. Chen has maintained a positive attitude about the direction BlackBerry is taking, and plans on returning the company to profitability in 2016.

Until then, BlackBerry's best bet is on new projects that appeal to today's buyers, especially when it comes to software. The indications in 2014 have thus far proved encouraging: Project Ion promises to move Blackberry into the realm of smart devices, while a new phone called Passport is due for a launch in September (interestingly, the announcement is expected to take place in London, not Canada or the U.S.).

However, the work in enterprise apps is especially heartening to see, as it allows BlackBerry to draw revenue from a variety of different industries without needing to sell them on a new phone. Unlike Cotap, BlackBerry is already a widely recognized name, and unlike Yammer BlackBerry products have a history in high-security industries. More BBM updates this year would be even more welcome for investors awaiting new growth. 

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Tyler Lacoma has no position in any stocks mentioned. The Motley Fool owns shares of 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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