Being a CIO is a lot like being the referee in a pro sports league. If you do a perfect job, no one notices you. But if you screw up, then you can become famous for all the wrong reasons.

Thus CIOs can be forgiven for being a little risk-averse. As a result, well-established vendors have a distinct advantage. This is why the phrase “no one ever got fired for buying IBM” is cited so often.

So, where does this leave BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY)? Does the company’s leadership in security make it the safe choice for CIOs? Or is it seen as a riskier option? Most importantly, what does this all mean for the stock? Below we take a look.

Security is a major advantage

In recent years IT security breaches have become far more common and far more damaging. Even large organizations, the ones you would think could afford adequate security, were affected. Notable examples just from last year include JP Morgan, Home Depot, eBay, and Sony Pictures Entertainment.

Meanwhile, BlackBerry is the clear-cut leader in security, something its competitors don’t even dispute. So logically, going with BlackBerry seems to be the lowest-risk option for a CIO.

BlackBerry’s big disadvantage

In most circumstances when you buy a product, you don’t care about the health of the company you buy it from. For example, if you buy a hammer from Home Depot, it doesn’t matter if Home Depot goes bankrupt the next day. You’ll still have the hammer.

But when a large organization buys technology, the transaction can be thought of more as a partnership, one that ideally will last for many years. The customer will count on the technology vendor to offer support services and provide upgrades. So, if the vendor goes out of business, then the customer is faced with a major problem.

By now, it should be clear what BlackBerry’s major disadvantage is. Too many CIOs see BlackBerry as a declining (or failed) company, one that may not be around in 5-10 years. For that reason, choosing BlackBerry may be seen as a risky option (i.e. the option that can get you fired).

This advantage is clearly hurting the company. Reports from companies like Morgan Stanley and Goldman Sachs indicate that BlackBerry’s software offerings are struggling to win shares.

What does this mean?

BlackBerry is certainly struggling with its image, and for that reason, shareholders should brace themselves for some disappointing quarters.

In the long term, the prospects for a takeover look pretty good. BlackBerry’s most valuable assets, as well as its security capabilities, would likely be more valuable in another company’s hands. So, if you can be patient, BlackBerry may still be worth holding.

2 out of 3 Canadian investors are making this investing mistake today--are you?

To succeed as an investor in today's market you MUST diversify your entire portfolio. Too many Canadians don't know how. Check out our new report to Diversify Like a Pro and get 3 FREE premium stock picks. Click here now to unlock instant access.


Let’s not beat around the bush – energy companies performed miserably in 2015. Yet, even though the carnage was widespread, not all energy-related businesses were equally affected.

We've identified an energy company we think offers one of the best growth opportunities around. While this company is largely tied to the production of natural gas, it doesn't actually produce the gas. Instead, it provides the equipment required to get natural gas from the ground to the end user. With diversified operations around the globe, we think it's a rare find in the industry.

We like it so much, we’ve named it as 1 Top Stock for 2016 and Beyond. To find out why, simply enter your email address below to claim your FREE copy of this brand new report, "1 Top Stock for 2016 and Beyond"!

Fool contributor Benjamin Sinclair has no position in any stocks mentioned. The Motley Fool owns shares of eBay, International Business Machines, and JPMorgan Chase.