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BlackBerry Ltd. Just Carved Out a Lucrative New Offering

For a company that is often criticized as lacking a plan and throwing out random concepts in the hopes of something sticking, the latest announcement from BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY) is, in a word, intriguing.

BlackBerry announced this week that it is planning to sell cloud-based messaging tools that leverage the company’s BBM messaging platform to software and app developers.

What’s BBM?

BBM, short for BlackBerry Messenger, is BlackBerry’s proprietary messaging service; it’s similar to (and predates) many of the common offerings that are on the market today. You might note that I mentioned that BBM is a service, not was a service. BBM was wildly popular years ago, but fanfare died down as BlackBerry prioritized survival over adding new features to the messaging platform.

As a result, BBM fell behind in rolling out key features that would bring in a larger user base, such as video chat, which was available in 2013 for devices running BlackBerry’s BB10 operating system, but, strangely enough, didn’t emerge for Android and iOS users until just last year. Other features, such as BBM’s social hook called Channels, had huge potential, but ultimately, they were left in a half-baked state for years.

Despite this, BBM as a messaging service remains the most secure platform available across the entire mobile landscape today — and this is what the new business offering is aiming to capitalize on.

Secure BBM is coming (again)

The new offering announced this week will allow app developers and software houses to leverage BBM through an Enterprise SDK to add secure messaging, voice, video calling, and even file sharing into applications with real-time notifications.

The potential for this in a secure environment is huge, particularly considering how critical privacy and security are becoming. Some of the use cases for this type of messaging could be transmitting patient images to offsite experts, or allowing insurance claimants to send photos and statements securely. Across law enforcement, medical, and even education, the new service could be a welcome addition.

This latest venture by BlackBerry will no doubt place the Waterloo-based company in competition with a variety of competitors that all claim to provide secure push-notification services. BlackBerry’s experience in the realm of security as well as the company’s network backbone, which extends the security of the content beyond the user’s end device, will be a tough advantage to overcome.

Does this make BlackBerry a good investment?

BlackBerry has tried the secure messaging pitch in the past, and it failed to garner any sort of mass adoption. Granted, the company was targeting consumers directly rather than focusing on real-life business scenarios, which may be the deciding factor this time around.

BlackBerry has been turning around impressively over the past few years to become a software-first company that is focused on security and enterprise. Identifying and then working towards that niche has given BlackBerry a sense of direction, but the company still needs to deliver on returning to profitability.

CEO John Chen noted late last year that 2017 would be when BlackBerry returns to profitability. That shift will be possible thanks to BlackBerry focusing on software solutions over the hardware revenue of years past. Software revenue in the upcoming fourth quarter is expected to top US$640 million — an increase over the US$494 million posted last year.

BlackBerry might still be too risky an investment for most, but the company is becoming more appealing.

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Fool contributor Demetris Afxentiou has no position in any stocks mentioned.

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