How much will Certicom failure hurt RIM?

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RIM logo While we have closely covered the back and forth between RIM and Canadian security specialist Certicom, we’ve never really taken the time to discuss why exactly RIM put forth the hostile bid after months of courting. Thankfully, James Rogers of TheStreet.com has done the work for us in a recent article:

Certicom develops a technology called Elliptic Curve Cryptography (ECC), which is used to secure data on a range of devices, including smartphones. The National Security Agency uses the same technique, and Certicom licenses its technology to a range of companies, including IBM, General Dynamics, Motorola and RIM.

Certicom is also openly canvassing other suitors, which could increase the pressure on RIM. Last month, for example, Certicom granted a number of un-named parties access to its ‘data room’ in an attempt to drive up its valuation. “The information provided in the data room is intended to facilitate offers reflecting the fair value of Certicom from interested parties,” it said, in a statement.

So in effect, by failing to takeover Certicom, RIM has lost out in three different ways: saving money by eliminating the ECC licensing fees, making money from licensing the technology to competitors, and extending its competitive advantage on security. The question becomes how much this failure has hurt RIM in the long run. Post a comment and let us know what you think.

|via TheStreet|