OTTAWA — As part of its shift away from phones toward software, BlackBerry announced on Friday that it would buy a rival, Good Technology, for $425 million.
Good was an early competitor to BlackBerry in the market for software used by corporations and governments to manage and increase security on employee smartphones. John S. Chen, BlackBerry’s chief executive, has made dominating that business a key component of rebuilding the company.
While the purchase will increase BlackBerry’s customer base, it also unites two companies with an unusually testy relationship. In 2004, Good settled a lawsuit over wireless email patents by agreeing to pay licensing fees and an undisclosed lump sum to BlackBerry.
Since then, the two companies have repeatedly denigrated each other’s products in their marketing efforts, a practice that extended to the highest levels.
“It’s clear that there was no love lost between the top staff,” Jack E. Gold, an independent analyst, wrote in an investment note. “Christy Wyatt spend much time and effort bashing BlackBerry whenever possible and John Chen responded accordingly.”
Ms. Wyatt, chairwoman and chief executive of Good, acknowledged that bringing the two companies together initially “sounded like a crazy idea.”
She added: “But when John and I sat down and checked off the boxes, it became more interesting.”
As companies and governments increasingly rely on mobile communications and data, Ms. Wyatt said size would become an important factor for companies that provide software to manage these areas. While the mobile device management software market is divided among a number of comparatively small companies, industry giants, notably Microsoft, appear to be eyeing the business, she said.
Good was once owned by Motorola before being acquired by Visto, which took its name, in 2009. Ms. Wyatt said the company had been losing money, as has generally been the case with BlackBerry. But while its new owner has been able to maintain and even expand its cash reserves during tough times, Good has been eating up cash. Without providing figures, Ms. Wyatt said the company had been moving “closer to break even.”
Analysts found both good and bad in the acquisition. Maynard Um of Wells Fargo wrote in a note to investors that in addition to giving BlackBerry more customers, Good’s technology would allow BlackBerry to improve how its software works with Android phones and Apple iPhones. During a call with analysts, Mr. Chen also said that Good was stronger than BlackBerry with some groups of customers, particularly the military.
The downside of the deal, Mr. Um noted, may be the costs from merging the two companies’ software. “We think the convergence of the two platforms may prove to be difficult,” he said.
Mr. Chen acknowledged that for a period, perhaps a year or more, BlackBerry would support Good’s software as well as its own technology. But he said that at the end of that transition “our combined product platform will be the broadest.”