BlackBerry’s software segment will be its main growth driver
BlackBerry's taking all the right steps to grow its software business (Part 10 of 10)
BlackBerry’s software segment could become its largest segment in a few years
BlackBerry (BBRY) currently earns only about 7% of its revenues from its software segment. As the chart below shows, BlackBerry currently earns about 46% of its revenues both from its hardware and services segment. Read A closer look at BlackBerry’s hardware business performance and BlackBerry plans to offset its falling service segment revenues to learn more about BlackBerry’s hardware and services segment.
However, in a few years, the software segment could become BlackBerry’s largest segment. This is because the company itself expects the revenue from its software segment to double from $250 million in fiscal 2015 to $500 million in fiscal 2016. And by the company’s own admission, its hardware and service segment will continue to decline fast.
When we consider that BlackBerry’s overall revenues declined from $1.19 billion in fiscal 3Q14 to $0.79 billion in fiscal 3Q15, we can see that any growth in any segment is welcome. And if BlackBerry can achieve its expected growth of 100% for its software segment, it will indeed be a great achievement.
BES12 is a major software release from BlackBerry
The company has started to take the right steps to achieve this goal. Last year, it announced the latest release of its mobile device management software, BES12. This was a major release from BlackBerry, as it can manage several mobile devices securely, including Apple (AAPL), Google (GOOG)(GOOGL) Android, and Microsoft (MSFT) devices in addition to BlackBerry’s own devices. This suddenly increases the addressable market for BlackBerry manyfold.
BlackBerry has also partnered with a number of companies to serve end-to-end security solutions to customers. BlackBerry has partnered with major companies such as Samsung, Boeing (BA), Salesforce.com (CRM), Accenture (ACN), and Vodafone (VOD) to grow its business.
All these initiatives are helping BlackBerry grow its subscriber base. It launched the EZ Pass program, under which users of older versions of BES can upgrade to BES12 for free. BlackBerry received an overwhelming response from this program and managed to increase subscribers rapidly.
BlackBerry is now looking to monetize BES12 through technology support and encouraging enterprises to buy premium versions of the software with enhanced security features.
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