AirWatch: The company that’s killing RIM

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

Matt Kwong
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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.”