Apple And Samsung Just Don't Have A Chance Against BlackBerry

| About: BlackBerry Ltd. (BBRY)

You have all probably read that both BlackBerry (NASDAQ:BBRY) and Samsung (OTC:SSNLF) have been cleared for use on Defense Department networks. Apple (NASDAQ:AAPL) has not yet been cleared, but is expected to be soon. One small surprise is that BlackBerry tablets were also cleared, but Samsung Android tablets were not.

The U.S. military is in the process of overhauling its security standards to be able to track thousands of Android, Apple and Windows devices that were recently found unaccounted for on Military networks, according to a recent report by the DOD IG. In the Department of Defense alone, there are over 470,000 BlackBerry devices, vs. 41,000 Apple and 8,700 Android devices. Up for grabs is a contract that will be rewarded whereby the U.S. military establishment will manage, monitor and enforce security for about 8 million devices.

However, with BYOD policies everywhere these days, the need for software that can manage all these different devices is a challenge. While the military has relied on BlackBerry, which has consistently received federal certification for protecting sensitive data, recently the military is also testing Android and Apple alternatives.

So the question is, do Samsung and Apple have a chance to compete against BlackBerry?

Samsung for its part has addressed many of the security holes in the Android operating system with Knox, as part of its enterprise initiative. According to Tim Wagner, Samsung's vice president and general manager of enterprise, the U.S. National Security Agency worked with Samsung to create "Secure-Enhanced Android," a version of Google's (NASDAQ:GOOG) operating system with multiple layers of software and hardware protection.

My question is, why is the NSA involved in a private sector initiative, helping and/or consulting a private firm to tweak the Android kernel, in order to help Samsung comply with DOD specifications to win a government contract? Is this not a case of favoritism?

My next question is, who will be updating this tweaked version of Android from now on? Is this exclusively Samsung's responsibility or will Google also be involved? Will the NSA help Samsung in the future? Can the military rely on some bootlegged version of Android permanently?

In addition, Knox only works with Galaxy S4 phones. Knox can be used as an MDM agent for many different devices, however, it can't really implement 100% of the DOD Inspector General's requirements across all platforms. And those requirements (among others) are to remotely wipe data stored on CMDs that were transferred, lost, stolen or even damaged. Also, it has to be able to install and uninstall apps remotely and set individual permissions and so on.

Samsung can do that on its phones, and even Apple has its own MDM software that can do what Knox can do, but there is no one software solution that can implement 100% of the DOD requirements across different platforms and on different devices. That includes BlackBerry's Enterprise 10 and Fusion.

What this means is that in order for the military to be able to implement the policies laid out in the DOD ID report, and support BYOD at the same time, it has to use different MDM solutions for each ecosystem.

So the question is this ...

Why would the DOD pick Samsung's Knox or even Apple's MDM software to manage all these devices, and force everyone buy an S4 device or an iPhone, when BlackBerry already meets all of the objectives?

Second, BlackBerry's new BB10 devices and MDM solution is above and beyond the requirements of the DOD. Why would the U.S. military go with a solution from Apple or Samsung that is new and has not fully been tested in the field?

The answer is they don't and my guess is they will not. While Samsung will get enterprise business in Asia where it has a very strong presence, I doubt very much they will get much business from the DOD or the U.S. military.

I just don't see any logic for the DOD to replace more than 470,000 BlackBerry devices already in use and in compliance with the DOD requirements, for some other vendor that does not have a rock solid security history in this line of business.

I also don't see why the military would want to make life difficult for itself and have different platforms and different MDM solutions just to offer BYOD. The military is not about choice but about efficiency, security and most of all practicality.

The bottom line

While both Samsung and Apple might have devices as secure as BlackBerry and MDM solutions that can probably do as much as BlackBerry Enterprise Service 10, at the end of the day the question is should the military gamble on someone else other than BlackBerry for a total solution, when it has all it needs today?

As such, I continue to think that BlackBerry will be the platform of choice for the military in the future and the contract to support and manage those 8 million devices throughout the military will go to BlackBerry.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.