Silent Circle Wants To Be The Modern Day Blackberry

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Blackberry was once the big dawg in mobile phones. It was in the hands of practically every knowledge worker on the planet, but its days of dominance began a precipitous drop after Apple brought the iPhone to market in 2007 and Android followed in 2008, and today it’s a tiny blip on the smartphone marketshare radar. That’s why it’s interesting that a new company, Silent Circle, seems to be eying the position of a modern-day equivalent of Blackberry, hoping to bring a new level of security to enterprise mobile devices.

If you need a history lesson, in 2009, nearly two years after the launch of the iPhone and one year after Android, BlackBerry controlled more than 40 percent of US marketshare. Today it has under two percent.

The problem is that Silent Circle, and its newly announced Blackphone hardware faces the same modern difficulties as Blackberry (and to some extent Microsoft) has. In the age of Bring Your Own Device (BYOD), the corporation is not buying phones for employees. They get to choose their own and they don’t tend to choose based on security (any more than most people buy cars based on safety ratings).

The people have spoken and they want Android and iOS and everyone else is secondary, but Silent Circle isn’t stupid. It also see this, which is why it also has a platform play, one in which you can take advantage of its security on the back end by connecting all your mobile devices to its secure server, regardless of the make or OS.

It has also built what it claims is a highly secure operating system called PrivatOS, a fork of Android, which uses the concept of private spaces. It described these spaces as distinct containers for work and personal information. For example, you could have one Twitter account on your work space and one on your private to keep them apart. In fact, you have multiple such spaces if you so desire (including a safe one for the kids).

BlackBerry and Samsung announced a similar approach last year, but it hasn’t proven popular. Where containers have always fallen short is that we don’t really have distinct work and private lives. This is particularly true with our calendar.

Time doesn’t know these kinds of distinctions. If your work calendar says you have a meeting at 4:30 and your personal calendar says you’re supposed to pick up the kids from soccer practice at 4:30, something has to give and chances are it’s going to untenable for most busy people

If all of this sounds familiar it should. It’s basically Act Two of BlackBerry’s playbook in an open source package. So why is Silent Circle taking this approach?

The Blackphone launched last year at Mobile World Congress to much fanfare as a secure device aimed squarely at consumers, and while it hasn’t given up on that notion, it noticed a distinct trend in sales. After launching the Black Phone 1 last June, it began getting requests from enterprises and governments to the tune of $750M worth of orders. That got the founder’s attention and it started to pivot to the enterprise. It’s worth noting that the company, which is based in Geneva with offices in Washington, DC, reports the vast majority of these requests have come outside of the US.

What’s more, Silent Circle reports that post-Snowden, the notion of a private phone, operating system and server (along with an app store) has appeal to companies. It sees a need and it’s simply trying to fill it, but as co-founder Mike Janke admitted, even though those orders may seem eye-popping to a start-up, it’s still a fraction of what Android and iOS are selling.

That raises the question if the company can find its way as a niche product for those companies (and governments) where security is paramount, they control the encryption keys and where they want to see the source code to prove it passes security muster.

It’s important to note that BlackBerry was the quintessential disrupted established company that stood stock still as the headlights of change rapidly approached and eventually simply ran it over. Silent Circle is not BlackBerry. It’s a young company with founders who have serious security chops.

As Janke said in the company press conference at Mobile World Congress yesterday, Silent Circle is not trying to be slick or hip. There will be no candy colors, curved screens or selfie sticks. “You are not going to see Britney Spears with smoke and mirrors singing about our product,” he joked.

It is all about security.

Can a company entirely focused on security succeed where one failed so spectacularly? Time will tell, but last year Blackphone had a cardboard booth thrown together at the last minute. This year with $50M in fresh funding, the company has a slick multi-floor booth with meeting rooms.

What a difference a year makes, but Silent Circle still faces some serious challenges ahead. The smartphone market is hardened. While it has the advantage that in the wake of high profile security breaches like Sony, Anthem and Target combined with the Snowden revelations, that security is top of mind, it’s late to the market and following in some well-trodden footsteps.

Can Silent Circle thrive while BlackBerry has had trouble holding on? We’ll see.

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