Falling Business

iIn the mobile tech trade, a business built on communication, rescinding a party invite is one way to send a frosty message. So when John Marshall, CEO of the Atlanta-based software firm AirWatch LLC, learned that Research In Motion Ltd. had "disinvited" him and six executives from the BlackBerry World expo last spring--a week before the May 1 conference, and with their Orlando flights and hotels already booked--the snub was obvious.

"Now we're seen as a direct competitor," Marshall says. RIM refunded the airline tickets. AirWatch, a "Bronze sponsor" since BlackBerry World in 2011, yanked its funding from the 2012 conference. The BlackBerry maker's hostility toward the little-known southern start-up was telling. Theirs is a see-saw relationship. When big organizations dump RIM's BlackBerry Enterprise Server--the once-pioneering software for handling workers' emails--they contract AirWatch to protect the data on mobile devices like iPhones and Android phones. Consumer choice is driving the migration, says Jefferies analyst Peter Misek, who tracks RIM. "As RIM's fortunes have faded, these alternative smartphone platforms have risen."

Long a stalwart of corporate networks, the BlackBerry Enterprise Server was for years touted for its encryption guarantees. The rub was that the platform was tethered exclusively to RIM products. Market research firm IDC forecast recently that the number of Apple iPhones and Google Android handsets for enterprise consumers this year will overtake the number of BlackBerry units shipped to employees for the first time ever.

AirWatch is suddenly and quickly eroding RIM's bread-and-butter business. Yahoo! and the Pentagon recently ditched the BlackBerry server so they could put non-RIM products into employees' hands. Coca-Cola, Lowe's, the National Bank of Canada, eight of the top 10 U.S. retailers and several U.S. federal agencies already use AirWatch. With 4,500 customers in 47 countries, it is king among just a handful of mobile...