RIM Buys NewBay

Despite all the dark clouds, RIM remains determined to prove it is not giving up, and is pursuing a path towards a modern, cloud-based world. To strengthen QNX (now BBX) it has engaged in an almost manic (perhaps desperate) series of acquisitions to boost its software platform, including the important The Astounding Tribe. The latest is Ireland’s NewBay Software, which makes a rapid service delivery platform for carriers. NewBay offers a range of tools for delivering messages, video, calendars and other types of con- tent. Its flagship product, the LifeCache Platform, is designed to help service providers roll out new services and integrate them with their networks and billing systems, in a simplified and cost effective way.

Focal Points:

• This would see RIM seeking to be more indispensable to carriers, rather than being acquired by one – and that makes sense, since the BlackBerry has flourished partly because it provides a back end service which drives traffic and smartphone uptake, while being famously efficient with the operator’s network resources. NewBay was founded in 2002 and claims AT&T, Verizon Wireless, Deutsche Telekom, US Cellular, Telefonica O2, Orange and Telstra among its customers. RIM did not disclose the price but said the acquisition would not be financially material to the company, though the rumor mill quoted a figure around $100m.
• It seems that RIM will use NewBay's LifeCache software as a foundation for future BlackBerry cloud-based content services, which could – like the email back end – provide a back-up business model should the firm continue to dwindle in actual device sales. RIM’s purchases this year have reflected a shift towards multi-platform services and cloud/web solutions. They included video editing company JayCut, mobile social gaming provider Scoreloop, and tiny-Hippos, developer of the Ripple multi-platform mobile environment emulator. These would be clever choices for a company with a functioning web device strategy, such as Google or Apple – but are just pebbles on a vast beach for a company facing the storms that threaten RIM.

Editor’s Note: If you read between the lines, RIM is not only trying to maintain is current market share in its traditional markets, but is trying to enhance its platform to be able to compete with the emerging markets as well.

There are two other potential paths:

• The first (although it contradicts the analyst’s view) is that RIM is positioning itself for acquisition. This is not unrealistic as the broader the product/service line the greater the company will look to potential suitors.
• Second, RIM does have an excellent back end service, which, by itself, is a product/service in itself. Along with that service are the patents and intellectual property that are attractive as well.