AirWatch: The company that’s killing RIM

How a start-up in Atlanta is stealing the BlackBerry maker’s most important clients

by Matt Kwong

ANDREW HNATH

In the mobile tech trade, a business built on communication, rescinding a party invite is one way to send a frosty message. So when John Marshall, CEO of the Atlanta-based software firm AirWatch LLC, learned that Research In Motion Ltd. had “disinvited” him and six executives from the BlackBerry World expo last spring—a week before the May 1 conference, and with their Orlando flights and hotels already booked—the snub was obvious.

“Now we’re seen as a direct competitor,” Marshall says. RIM refunded the airline tickets. AirWatch, a “Bronze sponsor” since BlackBerry World in 2011, yanked its funding from the 2012 conference. The BlackBerry maker’s hostility toward the little-known southern start-up was telling. Theirs is a see-saw relationship. When big organizations dump RIM’s BlackBerry Enterprise Server—the once-pioneering software for handling workers’ emails—they contract AirWatch to protect the data on mobile devices like iPhones and Android phones. Consumer choice is driving the migration, says Jefferies analyst Peter Misek, who tracks RIM. “As RIM’s fortunes have faded, these alternative smartphone platforms have risen.”

Long a stalwart of corporate networks, the BlackBerry Enterprise Server was for years touted for its encryption guarantees. The rub was that the platform was tethered exclusively to RIM products. Market research firm IDC forecast recently that the number of Apple iPhones and Google Android handsets for enterprise consumers this year will overtake the number of BlackBerry units shipped to employees for the first time ever.

AirWatch is suddenly and quickly eroding RIM’s bread-and-butter business. Yahoo! and the Pentagon recently ditched the BlackBerry server so they could put non-RIM products into employees’ hands. Coca-Cola, Lowe’s, the National Bank of Canada, eight of the top 10 U.S. retailers and several U.S. federal agencies already use AirWatch. With 4,500 customers in 47 countries, it is king among just a handful of mobile device management (MDM) vendors—companies in the hot market of securing data on office-issued devices. “If [a company] has more than 20,000 devices in the enterprise, that’s us,” says Victor Cooper, an AirWatch spokesperson. “We’re 99 per cent sure of that.”

The AirWatch platform puts various restrictions on employee smartphones and can add custom capabilities like encryption for email attachments. Among its four serious industry competitors—MobileIron, Fiberlink Communications, Zenprise and Good Technology Inc.—AirWatch stands out for its staggering growth. It has ballooned to 900 workers from 350 in the past 19 months. A new 100,000-sq.-foot headquarters in north Atlanta is nearly triple the size of its old office. Stock tickers overlook a cavernous trade floor—relics from the building’s days as an energy company. It has global offices in London, Melbourne and Bangalore, and a Canadian presence is planned for Toronto, Vancouver or Montreal.

AirWatch signs 500 customers a month, an estimated 80 per cent of which are enterprises letting staff use Android, iOS, Samsung and Windows smartphones. Unlike RIM’s BlackBerry-dedicated server, AirWatch supports all principal mobile players, RIM devices included. “It’s not unfair to say that due to some unfortunate events at our favourite Ontario-based smartphone maker, it’s certainly had a positive effect on our business,” Cooper says.

Dan Gifford, a former app developer for RIM in Atlanta, interviewed at AirWatch amid layoffs at RIM last July. He met twice with a recruiter before deciding to start his own web development venture. The BlackBerry server’s weakness, Gifford says, is its lack of support for most next-generation toys. “If you’re trying to move away from BlackBerry, there’s no question you’d just go with the AirWatch server.”

RIM isn’t ignoring today’s “more heterogeneous mobile market,” says Peter Devenyi, RIM’s senior vice-president for enterprise software. The BlackBerry Enterprise Server 10, which will debut Jan. 30 along with the new BlackBerry 10 smartphones, is a cross-platform solution “extended to support all devices.” Devenyi is also excited about a feature that is unique to BlackBerry 10 devices: the option to let users toggle between “work mode” and “personal mode,” which will clear corporate apps and sensitive data. “The beauty of it is the fact that it’s one phone which seamlessly separates your personal space from your workspace,” he explains, “like two phones integrated into one.”

To AirWatch’s CEO, though, it’s late to play catch-up in the MDM game. Marshall knows AirWatch and its competitors wouldn’t have been relevant had RIM offered a cross-platform solution first. Customers “won’t jump from our platforms to return to RIM,” he says. “It’s very hard to put the genie back in the bottle.”




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AirWatch: The company that’s killing RIM

  1. Way to go Macleans!

    Another Canadian media outlet that likes to

    downgrade Canadian enterprise.

    • RIM did this to themselves, AirWatch did it by themselves. MacLean’s is just reporting the reality of both companies. Would you rather they said, “it’s OK, nothing wrong here, everything is great”? Your attitude is what keeps people from publishing bad news articles when they should — much earlier

      • What took them so long to report this? Are they slow or what?

      • Really. Why should a good Canadian publisher avoid or misrepresent information significant to long-term investors and consumers alike? The upcoming RIM phones sound classy, but people should understand the growing flaws and compromises to the broader infrastructure that must support them.

  2. ya it’s depressing when Canadian Companies help American Companies pulverize Canadian companies to the ground. you guys suck.

    • Agreed. Just brutal. I will never buy another Macleans magazine as long as i live.

  3. Self-hating Canadians….take a number.

    It’s easier to tear things down, than it is to build them.

  4. This news is reality, not a Macleans issue. I support RIM but the writing may be on the wall, they need to speed up to compete. I have a lot of confidence in the team there, they are coming back.

  5. BB10 blows airwatch out of the water hands down. Macleans will figure that out soon enough,lol.

  6. We all know that analysts and the media have been bashing RIM for the last couple of years. There are way too many misleading reports out there. This helps drive the stock down. Billions are made by doing this.

    So BB10 is almost here? But how can this be?

    One top analyst said that BB10 will not be available till July 2013. Another top analyst said that RIM will burn all their cash and will never see 2013. A third one said that they will be obsolete before there new OS is ready. Rocco from seeking alphabet said that buying Rim shares is like catching a falling knife. Another writer said that RIM shares will trade for under $1.00 per share comes 2013. A top analyst gave RIM a 10% chance of surviving. Recently he changed it to 20%. Will he say 30% when Rim shows the BB10 phones on January 30th, then up it to 40% when stores receive the product. He will be up to 50% when the phones go on sale, then 60% if they sell well, and finally 70% if they are a hit. By this time, the share price will be up to $80.00 and the shorts will be chasing the share price all the way up to $120.00.

    How could all these people be so wrong? So very wrong.

    Do you get my point on how the Billions are made? They buy when the stock price is low, and sell it when it is high.

  7. Interesting timing. The event took place quite a while ago and RIM is set to launch their BB10 mobile platform on January 30th. I’m good with timely and balanced reporting of the facts, this article does not appear timely and comes across as a little more in favour of one side vs. the other based on the details describing each solution. Competition is good for everyone, so is balanced, honest and timely reporting.

  8. No mention of Mobile Fusion, RIM ‘s MDM That manages BlackBerry, iPhone and Android devices. Go figure, this article is semi propaganda

  9. I had no idea MacLeans was still in business.

  10. No business in their right mind would choose a byod environment . It’s labor intensive and highly insecure. Do you really think 10000′s of malware apps on you Android and iPhone will be securely managed by airwatch? byod was trendy for the last 2 years, now the results are in….its costly to manage and completely insecure, blackberry’s are looking good to these environments now

  11. Too much expert opinion from industry pros once again?

  12. Blackberry Mobile Fusion (their crossplatform MDM) has been available since April. However, adoption hasn’t been rapid because of the requirement to run it separately from existing Blackberry Enterprise Servers. An update (Mobile Fusion to “BES10″ and BES5 to Service Pack 4) will allow co-location of the two services. However it is fair to say that the “blow it up and make it new and better” approach has cost time and market position.

  13. If I was RIM I would challenge them to a competition: See who can hack into each other’s security. That would settle a lot of issues.

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