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BlackBerry offers itself up to six would-be buyers; Cisco looks like the best fit

BlackBerry offers itself up to six would-be buyers; Cisco looks like the best fit

The company has also asked SAP, Google, Intel, Samsung, and LG whether they're interested

BlackBerry has reportedly asked Cisco, Google, SAP, Intel, LG and Samsung separately to consider buying all or parts of its embattled company.

According to a Reuters report citing unnamed sources, BlackBerry has asked each of the six companies for preliminary expressions of interest by early this week.

Potential buyers would be most interested in BlackBerry's patents and its secure network -- not its smartphone business, the sources said.

If BlackBerry finds any takers from among the six companies, it would come in addition to the preliminary deal the company already has with Fairfax Financial Holdings. Fairfax wants to take BlackBerry private for $4.7 billion.

The secure BlackBerry network includes a Canadian network operations center and relationships with 500 carriers globally that connect to BlackBerry Enterprise Service (BES) servers in larger businesses to deliver email and other data.

Various analysts have valued the network at up to $4.5 billion, with BlackBerry patents worth up to $3 billion. BlackBerry has more than $3 billion in cash and investments, as well, but the smartphone business could cost as much as $2 billion for a potential buyer to dissolve, analysts have said.

While none of the mentioned companies is an especially good fit for parts of BlackBerry, Cisco is "probably the best," said Gartner analyst Ken Dulaney in an email on Monday.

Jack Gold, an analyst at J. Gold Associates, argued that none of the six companies would want to acquire and run BlackBerry in its entirety.

"The Fairfax deal could still be best way forward for BlackBerry," Gold said. "Fairfax could run them for a while and significantly increase the value of the overall company rather than the fire sale going on right now."

Gold said all of the companies except Intel might want BlackBerry Messenger (BBM), which has 60 million monthly users and is one of the few recent successes at BlackBerry. "I see no benefit at all to Intel buying BlackBerry," he said.

The BlackBerry network operations center could be of use to Cisco as a cloud-based Public Key Infrastructure system that could function across multiple carriers, Dulaney said. The BlackBerry network "would help [Cisco] glue together various endpoint devices across multiple networks," he said.

Cisco, however, likes to work through various networking business partners and those partners might see working with BlackBerry as too competitive, he said. "The rest of BlackBerry Cisco wouldn't want," he added. "They would never do devices."

Gold seconded Dulaney's view that Cisco wouldn't want any part of devices, after "very short-lived failures" with a PlayBook tablet and a handheld video camera called the Flip.

Gold added that Cisco could add the BlackBerry network its own social network through Webex to make Webex more secure for large business users.

Although Google might have some interest in the BlackBerry network, it can probably rely in cloud networking for its needs, Dulaney said. (Google already bought Motorola for its smartphones and patents.) And he doesn't think SAP would want BlackBerry, since SAP already has a competing Mobile Device Management portfolio.

As for Samsung and LG, Gold suggested they might want access to BBM and BlackBerry patents, and possibly the BES services. But Samsung is already creating secure handset software and services through its Knox program.

IBM would be a more plausible buyer than any of the six mentioned in the Reuters report, Dulaney said, because IBM could run BES and other portions of BlackBerry as services for larger customers -- some of whom need to keep BlackBerry services going since they still have a large installed base of BlackBerry users.

Dulaney recently urged businesses to consider dropping the BlackBerry platform within six months, citing the company's expected Q3 loss of $1 billion and planned layoffs of 4,500.

IBM could also add BBM to its SameTime and Connections social networks, a fairly convenient fit, as IBM already supports BlackBerry devices, Gold added.

There are other possible buyers for portions of BlackBerry. Oracle might want to acquire BlackBerry networks and services to beef up its mobile offerings, Gold said, noting that BlackBerry used Java software extensively in the past and Oracle owns Java patents.

Even Microsoft could use BBM and network services to merge into its cloud offerings, Gold said. "There's no shortage of possible speculation on who would benefit from a dissecting of BlackBerry assets," Gold said.

BlackBerry said in a statement Monday that the special committee looking at its restructuring is "conducting a robust and thorough review of strategic alternatives" and would not comment further until it has approved a specific transaction.

BlackBerry also wouldn't comment on reports that it still has off-book charges of nearly $3 billion in commitments to vendors for Q10 and Z10 series devices.

All six companies mentioned in the Reuters report declined comment on any plans for BlackBerry.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His email address is mhamblen@computerworld.com.

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