In recent years, BlackBerry (NASDAQ:BBRY) has finally come to grips with the fact that it has fallen too far behind the smartphone market leaders to ever catch up. Even in its last bastion -- the enterprise market -- BlackBerry has increasingly fallen out of favor.

As a result, BlackBerry has tried to pivot toward being a software and services company. It is targeting multiple addressable markets, but chief among them is the enterprise mobility management (or EMM) market. This allows it to leverage its strengths in mobile security to offer a multi-platform solution for securing and managing employees' personal devices.

To further its ambitions in this market, BlackBerry announced on Friday that it will buy one of its top competitors: Good Technology. The $425 million deal will significantly improve BlackBerry's positioning in the EMM space.

If you can't beat 'em, join 'em
For the past few years, there has been a growing rivalry between Good Technology and BlackBerry. Whereas Good Technology originally pitched its service as an alternative for customers who didn't need all of the security features that BlackBerry offered, it became more aggressive in courting BlackBerry clients around 2012.

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BlackBerry and Good Technology both offer services to manage mobile devices across multiple platforms. Photo: The Motley Fool

BlackBerry fought back by creating new multi-platform solutions (BES 10 and BES 12) that can manage iOS and Android devices as well as BlackBerry phones. BlackBerry has tried to capitalize on its reputation for offering the best security and its large enterprise customer base to keep clients in the fold even if they choose to offer employees a bring-your-own-device program.

To illustrate the extent of the rivalry between these two companies, last year BlackBerry marked up a Good Technology promotional document and released it as a "fact check." BlackBerry contended that Good Technology's comparison sheet ignored all of the capabilities of the BES 10 service.

However, BlackBerry dithered too long in opening up its device management service to rival platforms. This gave Good Technology and other competitors time to get some key customer wins and build up a solid security reputation. As a result, BlackBerry hasn't dominated the EMM market in the same way it once dominated the enterprise smartphone market. Since BlackBerry couldn't beat Good Technology, its next-best option was to acquire it.

Complementary strengths
The key to the acquisition is Good Technology's strength in iOS device management. iOS devices represent 64% of activations on Good's service. Meanwhile, BlackBerry already has a strong foothold in the Android device management market, thanks to a partnership with Samsung formed last year and expanded earlier in 2015.

By joining with Good Technology, BlackBerry will also expand its customer base and solidify its positioning with enterprises that have been using both providers.

The $425 million purchase price also seems very reasonable. It's less than three times the $160 million in revenue that BlackBerry expects to bring in from Good Technology in the first year after the deal closes. And while Good has not been profitable, BlackBerry expects the deal to be accretive to earnings and cash flow within a year, thanks to various synergies.

BlackBerry probably benefited during the merger negotiations from the poor performance of enterprise software stocks recently. This made a buyout offer more appealing to Good Technology's owners relative to an IPO.

Another step toward BlackBerry's transformation
BlackBerry CEO John Chen has set a goal of doubling BlackBerry's software revenue to $500 million in the current fiscal year. The company has previously disclosed that it expects its software growth to accelerate later in the year.

Acquiring Good Technology (and its sizable revenue base) should make it easy for BlackBerry to hit this goal -- especially on a run-rate basis -- by the end of the fiscal year next February. Looking ahead, combining BlackBerry's strength with Android and BlackBerry devices with Good Technology's iOS specialization could allow the company to win over new customers.

BlackBerry is clearly making progress in reorienting its business toward software and services rather than hardware. However, the revenue growth and profit potential of these new business lines is still hard to pin down. Investors will still need to be patient to see if John Chen can pull off another stunning turnaround at BlackBerry.

Adam Levine-Weinberg owns shares of BlackBerry. The Motley Fool has no position in any of the stocks mentioned. 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.