Why buy BlackBerry? What Cisco, SAP, and Google would gain/lose

Jack Gold is the founder and principal analyst at J.Gold Associates.

There seems to be speculation that Cisco, Sap or Google might want to purchase BlackBerry and bid against the Fairfax acquisition proposal, according to Reuters report.

In my opinion, it’s unlikely any one of these companies would be seriously considering acquiring BlackBerry in its entirety (or at least keeping it intact once it did acquire). I don’t think the probability of any of these companies acquiring BlackBerry is high, but here is my breakdown on what each company would gain and/or lose from such an acquisition. Remember, BlackBerry is essentially in three businesses; Devices, Enterprise Services (BES), and Social Services (BBM).

Cisco

Cisco has gone the hardware route before in devices (remember its foray into corporate tablets and its flirting with the handheld video camera –- both very short lived failures). So it’s unlikely that Cisco would want the handset business of BlackBerry. It could potentially take the secure network environment and add it to its already substantial social network (WebEx) to make that more secure for enterprises. But this would be a major overhaul to make them fit together and not a sure thing financially (could they get enough payback on the investment to make it worthwhile?).

Cisco could also make use of the BlackBerry Messenger service, although I don’t see it wanting to maintain the large consumer user base, but rather redirect it towards the enterprise users (again, adding to its existing social networks product base). I can’t see much interest for Cisco in the patent portfolio, so I don’t see this as a major driving force in any potential acquisition

SAP

There are two potential opportunities in buying BlackBerry for SAP. First would be the patent portfolio, which I don’t think would be a big benefit, but could provide some protection and negotiation leverage in law suits. But the bigger possibility might be the BBM unit, which SAP could integrate to their 365 unit, which sends huge numbers of text messages every day, and includes a financial services piece (e-payments) that could clearly benefit from the security built into BBM.

This, I think, could be a “sweet spot” for SAP in evaluating a Blackberry acquisition. But if SAP did acquire BlackBerry, it would likely divest (or shut down ) the handsets as there is no benefit to SAP there (in fact the opposite, as it tries to embrace the full spectrum of diversity represented by BYOD, of which BlackBerry is a decreasing portion). SAP might be able to utilize the enterprise network services as well to add to the infrastructure they provide to customers, but I don’t think this would be a huge benefit to their product offerings beyond what they already have.

Google

Finally, would Google be interested? Certainly, the financial burden for Google acquiring BB would be minimal as it has huge financial reserves. As I see it, there would be a few benefits. First is the patent portfolio which Google could add to the one it acquired from Motorola. Second would be the BBM network, not because it has huge numbers (60M) compared to Google’s own base of users, but because it offers a potential monetization engine that Google could leverage. But this is probably not a major concern to Google, as it has its own technologies to do this.

Finally is the handsets component, which Google could merge into the Motorola unit. It would certainly gain some engineering expertise, but is this sufficient for Google to bid on BlackBerry? I’m not convinced it is.

The takeaway: No clear bidder for BlackBerry

So the bottom line is, each company would have some benefit in acquiring pieces of BlackBerry, but I don’t see any of them wanting to acquire and run BlackBerry as a whole entity.

In looking at this scenario, there are certainly others that could benefit by a piece-meal purchase of BlackBerry assets. Microsoft could utilize BBM and BlackBerr’s enterprise networks services in its cloud offerings, along with the patents. Oracle, which to date has had minimal mobile offerings, could utilize the back end networks and the enterprise services if they were ported cleanly to multiple platforms (and BB used Java extensively in the past so Oracle could leverage the code base for Java which it owns). It could also use the patent portfolio to catch up with its competition.

IBM could use the enterprise platform to bolster its own Mobile First platform, as well as some of the patents, while shutting down or divesting the devices. It could also use certain components of BBM within its business social networks (SameTime, Connections), and it already supports BB devices so this might be minimal amount of integration effort.

There is no shortage of possible speculation on who would benefit from a dissecting of the BlackBerry assets. But I’m still of the opinion that the Fairfax deal could be the best way forward for BlackBerry, as it could run the company for a while and significantly increase its overall value, rather than the fire sale going on right now.

Jack Gold is the founder and principal analyst at J.Gold Associates, based in Northborough, Mass. He covers the many aspects of business and consumer computing and emerging technologies.