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451 Research Report on how BlackBerry offers secure embedded communications with BBM Enterprise SDK

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Leading analyst firm 451 Research’s Raul Castanon-Martinez looks at our Communications-Platform-as-a-Service, BBM Enterprise SDK. According to Castanon-Martinez: “The launch of the BBM Enterprise SDK is an important milestone for BlackBerry. It shows how the company is building on its security heritage to consolidate its transition into an enterprise software business. It also shows how BlackBerry will monetize its private secure network. This is a valuable asset that will enable BlackBerry to differentiate its offering.
Positioning the SDK as secure CPaaS is a bold move.” Read more inside.

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451 Research Report on how BlackBerry offers secure embedded communications with BBM Enterprise SDK

  1. 1. 451 RESEARCH REPRINT REPORT REPRINT ©2017 451 Research, LLC | W W W. 4 5 1 R E S E A R C H . C O M BlackBerry offers secure embedded communications with BBM Enterprise SDK RAUL CASTANON-MARTINEZ 08 AUG 2017 The company has launched the BBM Enterprise SDK, which enables developers to integrate secure communications into their applications. The launch is consistent with the company’s intent to transition into a software-based business and develop new revenue streams. THIS REPORT, LICENSED TO BLACKBERRY, DEVELOPED AND AS PROVIDED BY 451 RESEARCH, LLC, WAS PUBLISHED AS PART OF OUR SYNDICATED MARKET INSIGHT SUBSCRIPTION SERVICE. IT SHALL BE OWNED IN ITS ENTIRETY BY 451 RESEARCH, LLC. THIS REPORT IS SOLELY INTENDED FOR USE BY THE RECIPIENT AND MAY NOT BE REPRODUCED OR RE-POSTED, IN WHOLE OR IN PART, BY THE RECIPIENT WITHOUT EXPRESS PERMISSION FROM 451 RESEARCH.
  2. 2. BlackBerry has launched the BBM Enterprise SDK, an IP-based offering managed by the BlackBerry Network Operation Center. The SDK will enable enterprises and developers to integrate secure messaging, voice and video communications into their applications and services. BlackBerry is posi- tioning the new service as secure communications PaaS (CPaaS). The company is leveraging its ex- perience in secure communications and enterprise software to position itself as a provider of secure embedded communications. THE 451 TAKE The launch of the BBM Enterprise SDK is an important milestone for BlackBerry. It shows how the company is building on its security heritage to consolidate its transition into an enterprise software business. It also shows how BlackBerry will monetize its private secure network. This is a valuable as- set that will enable BlackBerry to differentiate its offering. Positioning the SDK as secure CPaaS is a bold move. It places BlackBerry in direct competition with Twilio, an industry heavyweight with strong influence in the market. This can be helpful in the introductory stage, but we believe there are impor- tant differences in its value proposition and the use cases it is targeting. BlackBerry has a competitive advantage in verticals with strict security and compliance requirements; its pricing strategy also rep- resents a competitive advantage and differentiation. There is still work to be done in terms of creating awareness and gaining market traction, but with a strong reputation in enterprise software, security and business communications, BlackBerry is starting off on the right foot. CO NTEXT BlackBerry announced the launch of the BBM Enterprise SDK in February. It remained in private beta until it was made generally available in June. BlackBerry is building on its security and enterprise IT heritage to position itself as a provider of secure CPaaS, offering API tools that enable developers and enterprises to integrate voice, mes- saging and video communications into their applications and services. CPaaS has emerged as a major source of disruption over the last five years. Early adopters include business-to- consumer (B2C) applications in verticals such as hospitality and transportation, as in the cases of Airbnb, Lyft and Uber. We are now seeing growing interest from organizations in other verticals, including banking, finance, gov- ernment, law enforcement, healthcare and retail. We expect these organizations will place a strong emphasis on privacy and security. BlackBerry aims to address these requirements with the BBM Enterprise SDK. P RO DUCTS The BBM Enterprise SDK enables developers to integrate secure real-time messaging, voice and video commu- nications into their applications and services. It supports secure messaging with capabilities for 1:1, multiparty, group and team chatting; secure voice and video communications; secure file sharing and collaboration; and secure real-time notifications. The instant messaging service includes features such as message editing, retrac- tion, read and received notifications, voice notes, group chat, and file sharing. The SDK supports iOS and Android. Developers who deploy the BBM SDK will generate and manage their own encryption keys. BlackBerry will not have access to the keys or messages sent through its network. The SDK meets standards and certifications such as HIPAA business associate; FIPS 140-2 validated cryptographic library; NIST Suite B Cryptography for signing, encrypting and hashing; Digital Signature Standard FIPS 186-4; Secure Hash Standard FIPS 180-4; AES Standard FIPS 197; HMAC Standard FIPS 198-1; and Cryptographic Key Generation NIST SP 800-133. 451 RESEARCH REPRINT
  3. 3. 451 RESEARCH REPRINT STRATEGY The SDK was launched in February in a controlled release. BlackBerry reports that 150 ISVs and developers down- loaded and embedded the SDK into their applications, generating revenue within 90 days. The SDK is industry- agnostic; early adopters include industries where secure communications are a priority. Beta testers include or- ganizations in healthcare, telecommunications, government and financial services. Named clients include Tundra Core Studios and Forrest Green. BlackBerry is placing emphasis on its pricing model as an important differentiator. The company states that, be- cause it uses its own network, it can provide more competitive pricing. Messaging is priced at $29 per user per year; for voice and video calls, the price goes up to $75 per user per year. BlackBerry provides unlimited voice and messaging; in contrast, the pricing model followed by CPaaS providers Twilio and Nexmo is consumption-based. These vendors have been successful with pay-as-you-go pricing for B2C applications. BlackBerry’s pricing model, on the other hand, is consistent with cloud-based enterprise software applications. We believe this makes a com- pelling value proposition for the use cases it is targeting. CO MPETITION BlackBerry considers its main competitor to be Twilio, the largest of the CPaaS providers. Founded in 2008, it has been around longer than most of BlackBerry’s competitors, and is a thought leader that carries strong influence in the industry. Its roots lie with SMS, but the company has expanded its portfolio to include voice, video and chat communications, and other services such as IP-based messaging. It has also expanded its customer base beyond tech startups and developers to include large enterprises in verticals with strict compliance requirements. An argument can be made that the BBM SDK is an IP-based offering and therefore different to the offerings of CPaaS providers like GENBAND, Twilio, ShoreTel and Nexmo, which provide access to the global telecom network. The purpose of CPaaS, however, is to enable developers and enterprises to embed messaging, voice and video communications into their applications. We believe this makes BlackBerry a competitor for CPaaS providers, with the exception of GENBAND Kandy, which targets service providers. Similarly, TeleStax also plays in the CPaaS space, but like Kandy its approach is as an enabler for service providers. We believe that ShoreTel, with its Summit platform, will be a key competitor for the BBM Enterprise SDK. It provides secure embedded communications and is targeting similar use cases as BlackBerry. ShoreTel is a PCI DSS service provider and is SOX- and HIPAA-compliant. Other providers of embedded communications include Nexmo, which was acquired byVonage in 2016;Tropo, which is now part of Cisco; Sinch, which was acquired by CLX Communica- tions in 2016; and TokBox, which is now part of Telefonica Digital.
  4. 4. SWOT ANALYSIS 451 RESEARCH REPRINT STRENGTHS The company’s key strengths lie in its ex- perience and reputation in secure com- munications and enterprise software. Its secure private network is a competitive advantage that enables BlackBerry to dif- ferentiate its offering. WEAKNESSES There is a lack of awareness in the market when it comes to secure communications, which is how BlackBerry is positioning the BBM Enterprise SDK. This will require the company to invest in market education to evangelize its offering. OPPORTUNITIES Demand for embedded communications will continue to grow. As adoption grows, there will be a stronger emphasis on se- cure communications. THREATS By positioning itself in the CPaaS space, BlackBerry is going head to head with Twilio, a thought leader with strong influ- ence in the market. A potential threat comes from emerging providers of secure communications that could seek to follow a similar strategy to BlackBerry’s.

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