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Good Technology buys BoxTone as EMM market shifts to bigger vendors

EMM consolidation continues with Good Technology's BoxTone acquisition, and more financial backing for smaller companies could create advances in IT.

Good Technology's move to acquire BoxTone for enterprise mobility management is the latest in a trend viewed as positive for the mobile IT community.

Good, one of the largest remaining independent enterprise mobility management (EMM) vendors, agreed to purchase BoxTone Inc. of Columbia, Md. The two companies have partnered for several years on software and sales, with Good's sales staff selling BoxTone products since October 2012.

Good now has a portfolio that combines its Good for Enterprise secure email platform and Good Dynamics mobile application management infrastructure with BoxTone's service management capabilities.

This could make Good attractive as either an acquisition target or an initial public offering, according to Michael Finneran, mobile analyst and president of dBrn Associates in Hewlett Neck, N.Y.

These [EMM] rollups are ultimately going to be the most valuable.

Craig Mathias, IT consultant, Farpoint Group

"It expands [Good's] capabilities, but I'm still betting the independent [mobile device management] market disappears in the next 12 to 18 months," Finneran said. "Everybody's going to get bought by somebody."

Consolidation is natural and it's going to continue, with mergers and acquisitions more likely in the EMM space compared to initial public offerings, according to Craig Mathias, principal at IT consultancy Farpoint Group in Ashland, Mass.

"These rollups are ultimately going to be the most valuable," Mathias said, citing IBM's acquisition of Fiberlink in late 2013 as an example of a large company adding a piece it didn't have in Fiberlink's cloud-based MaaS360 platform.

BoxTone has an industry foothold as a mobile service management provider and recently touted a new free Web tool that allows companies to calculate their total cost of mobile ownership. They've also developed a cloud-based mobile device management platform that has received adoption from major carriers in Japan, including KDDI and NTT DOCOMO, and could provide Good with an opportunity to expand more in that market.

"That's a fairly comprehensive offering," Mathias said of Good with BoxTone under its roof.

Because of its small 1,000-customer base, BoxTone had long been seen by industry watchers as a candidate for acquisition in a market that has seen a staggering amount of consolidation in recent months.

When asked what the BoxTone acquisition meant for the future of her company, Good CEO Christy Wyatt would not tip her hand either way, although another Good executive recently commented on the company's "acquisitive" nature.

Business as usual for BoxTone customers

Some Good or BoxTone customers could be wary about this deal, but because Good and BoxTone have been direct partners for nearly a year and a half, things should remain normal for BoxTone's customers, with better levels of support and integration, according to Wyatt.

Both companies said customers should expect no disruptions for BoxTone products and support.

"All the products are going to continue and we now have more resources to apply to the products," said Brian Reed, BoxTone's chief product officer. "There are other places we could have been acquired that were the types of places that could have chopped us [up] and run. That's not at all what this is."

EMM is a growth market, so it doesn't make sense for a company like Good to acquire BoxTone and then axe its capabilities, Finneran said.

A more realistic issue would be where a company gets its virtual desktop infrastructure from Citrix and their MDM from AirWatch, just to see AirWatch purchased by VMware.

EMM has evolved from the forte of smaller companies to larger ones, but smaller companies being purchased by larger ones doesn't necessarily make the smaller company's product better, according to Mathias.

"There's a better shot at the products having longevity and providing a more comprehensive set of functions if larger firms are behind the future innovations in the space," Mathias said.

Why BoxTone was a 'Good' fit

The fit between BoxTone and Good made sense because of a great deal of customer overlap in similar markets, according to Reed.

"It's clearly not a market for small players," Reed said, noting that Good, Citrix, VMware and IBM are the big players in the EMM space now. "Being part of a larger entity means we're better equipped for the battle. … If you're not in a company that's generating $150-$200 million in revenue with that kind of war chest to spend on go-to-market and [research and development], you're in trouble."

Good found an interest in BoxTone because of its approach in mapping out analytics for a company's mobile environment, Wyatt said.

"It's a tremendous amount of value for our customers in being able to do that kind of support and management for mobile as their deployments become increasingly hard and complex," Wyatt said.

There is no timetable for the acquisition to close, and while Wyatt would not comment on an exact dollar figure for the transaction, she put the valuation in the "hundreds, not the tens of millions" of dollars.

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