Legacy IT vendors transform to survive the mobile, cloud evolution
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Some say the writing is on the wall for Blackberry, but others see glimmers of hope in the company's plan to nurture its enterprise roots.
Blackberry erred in releasing its touchscreen Z10 smartphone before the keyboard-based Q10. The Z10 was the first smartphone to run the BlackBerry 10 OS, and it's similar to Apple's iPhone. This alienated BlackBerry's base of keyboard-loving customers, said Rob Enderle, principal analyst at Enderle Group in San Jose, Calif.
"You want to protect your base first, and then go after an additional market," Enderle said. "They didn't protect their base."
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BlackBerry introduced the Z10 to go after the market Apple and Android staked out, but it simply wasn't as good of a product, according to Jack Gold, mobile analyst and founder of J. Gold Associates in Northborough, Mass. He believes the follow-up, Z30,is much improved.
BlackBerry recently said it plans to return to QWERTY keyboard phones, which signals a refocus on products with enterprise appeal, analysts said.
"Right now they're trying to hold on to the core enterprise users they have," said Eric Klein, senior mobility analyst at VDC Research Inc. in Natick, Mass. "They can actually grow that business if they execute well."
However, John Sims, BlackBerry's president of global enterprise solutions, has maintained that the consumer market is still important to BlackBerry, and it will continue to develop both touchscreen and physical keyboard devices.
As mobile IT shifts to bring your own device (BYOD) environments, BlackBerry runs a risk if they focus on enterprise products. With end users exerting more control, Matt Kosht, an IT director at an Alaskan utility company, thinks device makers must consider the consumerization of IT with any handset aimed at the enterprise.
"With BYOD, it's the same market," Kosht said. "The same guy that's going out to buy the iPhone is buying it for work and personal stuff."
BlackBerry software and systems in focus
BlackBerry Enterprise Server (BES) is expected to be a core part of BlackBerry's enterprise strategy. The company hopes to make the platform easier to use for customers who have different generations of BlackBerry devices. It also plans to strengthen cross-platform capabilities and improve its server administration user interface.
BlackBerry must convince customers it's one of the better enterprise mobile management platforms available, according to Gold.
Right now they're trying to hold on to the core enterprise users.
mobile analyst, VDC Research
"It's not just BES 10 for BlackBerrys, because people are moving away from BlackBerrys," he said. "It's BES 10 as an alternative to an AirWatch or a MobileIron or whomever. That foundation is what's going to let them expand in the enterprise."
BlackBerry's recent BES 10 updates tout enrollment capabilities for iOS and Android devices, which Enderle thinks presents its own set of challenges.
"It's hard to get the cooperation you need from a competitor to do something like BES agnostically when you're competing with the very platforms you're trying to manage," he said.
Blackberry CEO John Chen heralded the company's renewed enterprise focus as a key part of its turnaround in a letter released at the same time as the BES 10.2 update. Software, in particular, will be a major component of that focus, including features such as BlackBerry Balance, which competes with Samsung's Knox secure container.
In its Q3 report, BlackBerry said it added more than 40 million BlackBerry Messenger (BBM) registrations on iOS and Android devices in the last two months of 2013 and that BES 10 installations were up to 30,000 commercial and test servers from 25,000 three months earlier.
In addition, BBM now comes pre-loaded on devices from more than a dozen Android original equipment manufacturers, including LG, furthering its efforts to be device-agnostic.
"Getting traction with the hardware OEMs is absolutely going to help them quite a bit," Klein said.
BlackBerry aims for financial, product goals
BlackBerry's goal is to attain neutral cash flow for the coming fiscal year and find profitability once again in fiscal year 2016, Sims said.
"In order to meet this goal, we're re-pivoting our business and focusing on our enterprise customers," he said.
When asked about a "halo product" as BlackBerry's saving grace, Sims said that instead, BlackBerry will focus on returning to its roots in secure, enterprise-grade mobile products, with an eye to IP messaging and Internet of Things through BBM and QNX Embedded business.
He also added the company's security infrastructure remains its hallmark, which could provide the base for many more possibilities in the future.
"We believe this affords us the opportunity to enable our customers to do so much more with our platform in the areas of communication, productivity and collaboration," he said.