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BlackBerry’s software segment has huge growth potential

BlackBerry's taking all the right steps to grow its software business (Part 4 of 10)

(Continued from Part 3)

The addressable market for mobile device management is 500 to 600 million subscribers

In the previous part of this series, we discussed BlackBerry’s (BBRY) latest software release, BES12, and how the company’s EZ Pass program has gained traction. We also discussed how BlackBerry has managed to grow the license base of the software. However, this is just the tip of the iceberg.

According to BlackBerry and as the chart below shows, the total addressable market for mobile device management is about 500 million to 600 million. However, currently, only 40 million Blackberry smartphones are in use in enterprises. And out of these, only about 8 million to 10 million are paying customers for the company’s BES software. Within this set of customers, about half have migrated to the BES12 software release with the help of the EZ Pass program. And about 30% of subscribers who have migrated to BES12 came from competitors.

SAP and IBM are the only big players in the MDM market along with BlackBerry

This goes to show that BlackBerry could grab a much bigger share of the overall enterprise smartphone market for the purpose of up-selling its own mobile device management (or MDM) solution, BES12, to enterprises.

According to John Chen, the CEO of BlackBerry, there aren’t many serious players in the MDM market. During the fiscal 3Q15 earnings call, he mentioned that SAP’s (SAP) Afaria and IBM’s (IBM) Fiberlink are some of the bigger players in this market. But neither of these companies reveals its subscriber numbers. Then there are some pure-play players such as Citrix (CTXS) and VMware (VMW), but overall, there aren’t many players in this market.

The problem is that many enterprises still don’t use the MDM solutions or don’t feel the need for them. However, with the increasing number of security issues experienced by enterprises, this thinking could change. We discussed this outlook in Part 1 of this series. So overall, BlackBerry has huge growth potential for its software segment.

Continue to Part 5

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