WORD IS: IBM is Kicking RIM’s Enterprise Services Unit’s Tires

By: Kuljit Grewal  |   August 11th, 2012   |   Business, News, O Canada, Smartphones

According to Bloomberg News, Intelligent Business Machines (IBM), the world’s largest provider of enterprise computer service is interested in acquiring RIM’s Enterprise Services Unit. Citing two sources with intimate knowledge of the situation, an informal approach was made on August 10, 2012.

 

Although RIM has seen better days both in terms of market capitalization and reputation, there is little denying the value of the Enterprise Services portion of their company, which runs RIM’s legendary secure and rapid email system. That system has been a staple of many business world-round who prefer it to the heavily consumer geared competition.

 

According to various industry experts, the business is valued at anywhere from $1 billion to $2.5 billion depending largely on how RIM is able to distinguish the Enterprise Services aspect of their company from the division that makes their phones. RIM’s email system has long been an integral part of their devices’ overall user experience and product offering and in many people’s eyes the only aspect of the business that truly has any remaining value. It would have to be modified to suit other operating platforms in order to achieve its full potential if sold. RIM’s ability to do this will ultimately impact the division’s value.

 

The acquisition falls in line with IBM’s bread and butter business, which is almost exclusively focused on enterprises computer services. A reliable and fast email network would be a major coup for the industry stalwart, allowing them to provide a more complete service offering to their current and future clients.

 

Although the move is being considered by RIM, who with the help of JPMorgan Chase & Co. and RBC Capital Markets is in the midst of a strategic review, the likelihood of a decision coming soon is unlikely. RIM and CEO Thorsten Heins are optimistic that their upcoming operating system BlackBerry 10 (BB10) will bring it back to relevance and could open doors to an eventual partnership or licensing agreement with a handset maker.

 

If that is indeed the case, we may have to wait until Q1 of 2013 to find out how far the RIM and IBM dealings go. Until then, the news has been a positive for RIM who have seen their stock price increase 5 per cent since news broke.