RIM Buys NewBay
Another acquisition for Research In Motion. The BlackBerry maker is buying NewBay Software, a provider of white-label cloud-based content services. RIM confirmed to AllThingsD that it has signed an agreement to acquire the company, but declined to provide any further details.
Context & Ripple Effects
The NewBay deal is the latest in a steady drumbeat of RIM tuck-ins — after the Chalk Media purchase in 2008, the DataViz assets in September 2010, and the Viigo acquisition in March 2010 — each adding software capability rather than scale. What distinguishes this one is the target: NewBay sells white-label cloud-based content services, meaning its customers are operators who rebrand the technology as their own.
First-order effects
- RIM gains a cloud content platform it can sell through carrier partners, extending its operator relationships beyond handsets and BlackBerry services at a moment when its smartphone business is showing what analysts called a counter-cyclical decline.
- NewBay's existing white-label customers now have their content-services vendor owned by a device maker, raising immediate questions about neutrality that RIM has not addressed by disclosing terms.
Second-order effects
- Carriers looking for cloud content offerings without building their own now face a choice between a RIM-owned supplier and alternatives, tightening RIM's grip on the operator channel even as its device share erodes.
- Apple and Google already bundle consumer cloud services with their devices; RIM's move pushes the contest toward carriers as distribution partners for cloud content rather than pure hardware competition.
Third-order effects
- If the pattern holds, handset makers under pressure increasingly buy services-layer companies to keep relevance as hardware margins compress — RIM's string of small acquisitions reads as a deliberate build-out of a services portfolio alongside its QNX-based BlackBerry Colt roadmap.
- White-label cloud infrastructure consolidates into fewer hands, giving large platform owners leverage over which operators can offer competitive content services.
The trend: Struggling device makers are acquiring cloud-services capability to shift their value proposition from hardware to operator-delivered services.