What would Microsoft get by buying BlackBerry?

What would Microsoft get by buying BlackBerry?

Summary: As soon as Microsoft revealed it is buying Nokia's phone business the suggestions started that maybe Microsoft should snap up BlackBerry as well. But would that even make sense?

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As soon as Microsoft revealed it is snapping up Nokia's phone business, the suggestions started have that it should grab BlackBerry too.

On the face of it BlackBerry's enterprise credentials and loyal user base might make it the next target for Microsoft. And yet: BlackBerry has a strong ecosystem and great technology (even if it no longer has the sales to match them), but they're so different from the Microsoft ecosystem and architectures (and in other ways too similar) that it's hard for me to see what sense a tie up between Microsoft and BlackBerry would make. Here's  why.

Adding BlackBerry would create operating system overload

In Nokia, Microsoft acquired not just a smartphone maker, but also the team that makes Asha and feature phones like the Nokia 515. Microsoft is going to carry on making Asha phones that it can fill up with Microsoft services, in the hope that users will want a Windows Phone as their first smartphone. That's a whole new operating system (Series 40) Microsoft has to get up to speed on.

Even though the Nokia team stays in place to build the phones, there's the service integration for all the Microsoft services teams to care about. Microsoft might be able to handle that for one extra OS; it's a bit of a stretch to say it could do it for two at the same time. And while Microsoft once promised integration with Bing services for BlackBerry devices, those services never arrived.

If Microsoft were to buy BlackBerry, it would be getting BB7 and BB10 smartphones that compete directly with Windows Phone. It wouldn't make sense to sell those as well, so Microsoft would be buying BlackBerry so they could throw away the BlackBerry OS and have the BlackBerry team make Windows Phones. Microsoft would be getting the BlackBerry name, but that hasn't done as much to sell BlackBerry 10 devices as you might have expected.

There are few components of BlackBerry OS that would fit comfortably. To me, it seems the QNX OS and QT/Cascades framework are just too different, and the Torch browser is based on WebKit so you can't add any of it to Internet Explorer. The Balance security tool that divides the phone into 'home' and 'work' partitions relies on both QNX and BES; and Microsoft already has hardware encryption in Windows Phone.

A Qwerty Windows Phone handset?

While BlackBerry offers probably the best keyboard any mobile device has ever had, and there are still fans of physical keyboards, with the trend towards bigger and bigger phone screens, it's not clear how large the market for a Qwerty Windows Phone would be.

But even if it would sell well, it's not just a case of loading up a new OS onto BlackBerry hardware. The BlackBerry team would have to learn to build a phone using Windows Phone and the Qualcomm platform used for all Windows Phone hardware; it would be much faster to have the Nokia team make a Qwerty phone.

BlackBerry has some excellent developer tools, but they're for the BlackBerry architecture. Some of them are open source, like the Ripple mobile emulator which lets you test mobile web apps for PhoneGap and BlackBerry WebWorks, so if Microsoft wanted to support them it could just get involved in the open source project.

BBM versus Skype

BBM has worked so well because each phone was connecting to the BlackBerry backend network; the BBM service knew when a message had been delivered to another phone and when it had been read. It won't have quite as much information when it comes to iOS and Android — and it wouldn't get that information on Windows Phone either. Microsoft has already killed its own hugely popular Windows Live Messaging service in favour of Skype; if it bought BBM it would have the same problem all over again.

Exchange and Intune, and BES 10

The crown jewel for BlackBerry has always been the BlackBerry Enterprise Server, which connects to each handset to control it. You can turn off the camera, block Facebook, stop people browsing the web and do whatever else an admin wants to lock the phone. BES 10 can manage Android and iPhone handsets as well as BlackBerrys, but Microsoft already has tools to manage those as well; basic ones in Exchange and rather better ones in Intune.

The third-party phone management tools in Intune and BES 10 are roughly comparable — because they're based on the APIs that Google and Apple make available. If you want to do more than that, you need to put an agent on the phone the way Good or MobileIron do.

What BlackBerry does have is the tools to put a secure partition on an iPhone or Android phone. Microsoft's approach is to offer cloud storage in SkyDrive and SkyDrive and SharePoint/SkyDrive Pro clients for Android and iOS. You will also be able to control documents using Azure Rights Management; you'll be able to send a document to someone with a Gmail account that they can open on their phone, but not change or forward it unless you've given them permissions.

Even BlackBerry has given up on BES as an email delivery system; with BES10, email goes to your BlackBerry over Microsoft's near-ubiquitous EAS protocol, wrapped in a secure tunnel. Obviously Exchange uses EAS. Email is encrypted on a BlackBerry handset; but when you connect a Windows Phone handset to Exchange, as long as you require a password on the phone your Exchange profile turns on device encryption too.

How about the secure backend network itself? Again, it's very tied to the BlackBerry design, so it would have to be repurposed. If Microsoft wanted something like that, it would probably be quicker and cheaper to build it. In fact, that's just one of the things Microsoft's Azure cloud service and the Azure Active Directory offers. Developers can already use Azure Mobile services to add cloud storage and push notification to iOS and Android apps and Web apps as well as Windows Store and Windows Phone apps.

The future of QNX

The kernel of BBOS is QNX, and BlackBerry also owns the company. Microsoft has Windows Embedded, which is a real-time operating system used in a lot of devices — including cars powered by the Microsoft Auto platform — like Ford with SYNC. But what QNX has is a real-time operating system certified to run nuclear power stations and already used in a huge range of cars, a distributed operating system that can treat a device in another country, or in the back seat of the car, as just part of its own file system. It's a huge asset for BlackBerry, and one it hasn't yet taken advantage of for connecting devices (beyond the screen sharing in the latest BBM).

It's possible to see Microsoft taking that QNX kernel and wrapping it in the Windows APIs as a next generation of the Windows Embedded and Auto platforms. That could create a new SYNC that could spread across cars, homes, and on to mobile devices with a future Windows blending NT and QNX in a cluster of virtual machines. But that's an option that would require much investment, and it's a question whether a Microsoft, in the process of its own massive reorganisation, would want to. Microsoft would probably prefer to scale Windows RT down to smaller devices and car dashboards.

How about the patents?

Sadly, BlackBerry's hefty patent portfolio would probably be the most attractive part of a deal for Microsoft. One analyst suggested they'd be worth $2 to 3bn if BlackBerry wanted to licence them — which would double the $3bn cash the company is sitting on — or as much as $5bn if someone bought them outright. Given the option, Microsoft tends to licence patents rather than buy them — and it's unlikely it would buy the whole company to get them.

But here's a thought — who has a great phone brand they can use any time after 2015 but no team to build phones? Maybe Nokia will snap up BlackBerry to have another bite at the smartphone market itself — to me it seems about as likely as Microsoft signing a cheque for the Canadian company to get its phone goodies.

Further reading

Topics: Smartphones, Microsoft, Nokia, BlackBerry, The Microsoft-Nokia Deal

Mary Branscombe

About Mary Branscombe

Mary Branscombe is a freelance tech journalist. Mary has been a technology writer for nearly two decades, covering everything from early versions of Windows and Office to the first smartphones, the arrival of the web and most things inbetween.

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32 comments
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  • You've underestimated QNX's value

    The WinCE core isn't ever going to get to where QNX is. And Windows RT has no prospects of ever doing so: it is not a different Windows from Windows.... its just normal Windows with the HAL pointing at Arm chips.

    QNX gives Microsoft, if it buys it, the kind of stature in Realtime OSes that it already has in desktop computing. And given that Microsoft has not been able to break out of desktop computing, that could be a very good thing for them.
    Mac_PC_FenceSitter
    • How real does real-time have to be

      WinCE 6 onwards have a lot of what counts as realtime for things less critical than running nuclear power stations. QNX is for sure a lot more powerful and capable - the question would be if Microsoft feels it needs that power and whether it can integrate it if it does. I'm not looking at the *intrinsic* value of QNX but of its value to Microsoft.

      It's part of the specialist/generalist operating system debate, I think.

      Windows RT is from the same kernel as Windows Phone 8; that's real-time enough to run a phone (I was dubious but WP8 has been rock solid). You wouldn't use it for engine control but a sealed-case OS with good power management, limited attack surfaces, voice recognition - makes more sense than putting Android in a car for infotainment and that's been mooted more than once. RT alongside CE for a car system would give Microsoft a control surface and an app platform.
      mary.branscombe
      • In theory you're right but in practice completely wrong...

        Over time Windows CE has proven itself problematic mainly because of it's awkward build process and all the BPS stuff.

        On the other hand, WinNT needs smartphone spec sheets (1Ghz SoC, 1/2Gb RAM), which would bankrupt any low end infotainment system today (must have a BoM no greater than $150 bucks including touch screen and motoring hardening).

        QNX has a proven track record both on tight mem specs and on extreme realtime situations. Also it's Unix-like, so it's better adapted to POSIX style scenarios. BlackBerry already has ported an Android runtime and OpenGL both which could be hardened.

        Microsoft needs this kind of expertise if it wants to compete against Samsung and its SEAndroid and SELinux fronts. Also, Xen offers a rather safe visualization environment for environment which pretty much silences the "limited attack surfaces" as you can use loopback devices and virtualized "if" ports, or even create special /dev instances with integrated firewalling and anticorruption schemas.

        All of this is doable in WinNT but cumbersome and resource intensive. With Linux and QNX is simple and straight forward due to the Unix/POSIX under pinnings.
        cosuna
    • WinCE?

      WinCE was killed off with WP7.8. WP8 is based on the Win8 (NT) core OS.
      rmark@...
      • Please keep up - we're not talking about phones

        We're talking about RTOS. And yes, WinCE very much is the basis for Windows Embedded.
        Mac_PC_FenceSitter
      • You need to straighten your facts...

        Windows Phone 7.* (pre 7.8) is Windows Embedded Compact 6.0 based.

        Windows Phone 7.8 is Windows Embedded Compact 7.0 based.

        Windows Phone 8.x is Windows NT maybe 6.2, 6.3 or maybe a special 8.0 version with real time extensions (aka the Vista kernel, including the new driver spec).

        Windows RT (8.0 and 8.1) are Windows NT 6.2/6.3 kernels with no extensions running on a different BPS than Windows Phone (WP are all Snapdragons, Surfaces are all Tegras.)

        Windows 8.0 and 8.1 are Windows NT 6.2/6.3 kernels for generic AMD/Intel x64 and Intel x86.
        cosuna
  • I wouldn't make your assumptions

    The patents are the biggest value, even if you don't actually use the technology yourself. The enterprise software should merge into existing product or be phased out over time based on suitability and applicabilit. No BB or qwerty handsets, that's already DEAD. BBM service may have a niche or could be a spinoff. Other parts as well either use the pieces where they fit or sell them off or leave them on the table for the next guy. This is such a no-brainer the only thing to decide is the strike price.
    greywolf7
    • that's not buying the company

      BlackBerry is trying to sell itself or take itself private; if they just sell the patents, it's breaking the company up for scrap
      mary.branscombe
      • Some of its not viable

        Pieces are the only way it goes from here even IF someone buys it ALL.
        greywolf7
    • The world's largest patent troll

      I like it..........MS as the world's largest patent troll............
      **owly**
      • Re: the world's largest patent troll...

        They would have to actually catch to the largest patent troll, Apple. It's doable though.
        Mechamerlin
  • Nokia Buy Blackberry?

    Until the last paragraph, I really liked your article. Buy Nokia buy Blackberry? Nokia was serving its own customers, with existing goodwill, and had just passed Blackberry in market share. If I'm selling a more successful platform serving customers I already have a relationship with, why would I buy a worse platform and a foreign customer base after they had two more years to deteriorate further?
    WebSiteManager
    • Buy Nokia Buy Blackberry

      But Nokia buy Blackberry. [They could sure provide an 'edit' link around here.]
      WebSiteManager
      • I said it was a wild conspiracy theory ;)

        Didn't say it was likely!
        mary.branscombe
  • interesting but highly possible as its business software is very secure

    As a former user of BB, I can say that mainly patents and the enterprise software are the main two things that they really have to offer to someone like Microsoft, whose is heavily involved in businesses as we know. No one wants that crappy android ported app world or bbm as whatsapp is where its at for me. I'm giving this a fair review as i feel its necessary to say as I have nothing against them as I've owned bb till 2010... So mainly I'm glad i left and on to better things like ios, android, and recently wp8. So i have bbry in the past and never looking back. they were great for their time but time to move on to other options in the market...
    ITGuy000
    • I agree.

      The company and services are of no use to a company like Microsoft. The also don't mesh well with Microsoft's direction. The ONLY reason I can see for Microsoft to consider buying BB is to acquire the patents so that it can boost income from Microsoft's patent licensing business. BB is a few years overdue to be dismantled for parts.
      BillDem
  • What would Microsoft get by buying BlackBerry?

    Microsoft wouldn't gain much. They already have software, they now have hardware, they have communications servers. Microsoft would only buy blackberry if it was at an extremely cheap cost otherwise blackberry has nothing to offer.
    Loverock-Davidson
  • Technical advantages aside...

    I can't imagine any of the regulatory agencies letting an MSFT acquisition of Rim go through after the Nokia deal - too much consolidation of the market.
    man_on_the_hill
    • Maybe that was true back in 2007

      Today Microsoft, Blackberry (nee RIM), and Nokia COMBINED barely register on a regulator's RADAR. Hell, some regulators might encourage it as a, potential, counterweight to the iOS/Android hegemony.
      matthew_maurice
  • MS has HUGE problem

    MS has relied on sales of ever newer versions of Windows and it's productivity software to drive it's revenue stream....... and of course each new computer comes with a new copy of Windows, and various other software packages. Unfortunately for them, the consumer is waking up to the fact that newer versions offer little if anything compelling. Witness the stubborn unwillingness of users to upgrade from XP. Likewise the productivity software........... The only way to get people to upgrade is to make it impossible or very difficult to simply bring their old copy of Office to their new machine. Thus "software as a subscription". But LInux OSs and open source software is an increasing threat. What does Windows offer that I need that Linux doesn't? Nothing except the ability to run a single program I can't run under Linux. Breaking into the smart phone market offers a reprieve to some extent. The perception if not reality that somehow MS is more "enterprise friendly" than Linux, Android, and IOS / MacOS, has the potential to drive enterprise business to MS........ at least until people figure it out. MS is desperately flailing around for a life preserver...... something to preserve their relevance in the long term. We don't need Windows any longer..... that bloatware called "Office" is absurd for most of us. Their strategy of driving the PC market by selling an OS that by design bogs down and becomes unstable over time so users convince themselves they need the latest and greatest i s no longer working in the face of Linux systems that remain fast and stable, and the onslaught of mobile OSs. Enterprise is the direction MS needs to go long term........ those of us who have been milked by MS since the 80's will be standing around at MSs funeral.......... to make sure they are DEAD!
    **owly**