September marked a dramatic new chapter for beleaguered smartphone and tablet maker BlackBerry with a trio of major announcements. The first announcement provided confirmation that the long-rumored clients for BlackBerry Messenger (BBM) for Android and iOS were finally being released. The latter two were less positive, revealing deep losses and a plan to lay off nearly a third of its workforce, followed by plans to sell itself and go private.
These are obvious and painful admissions that the company’s last best effort, a revised smartphone OS and new hardware, failed to generate public or enterprise excitement. The company took a major and long-overdue gamble but offered too little innovation compared to leaders Android and iOS, and they released the device they should have released four years ago in order to stay relevant. So, what’s next for one of the few remaining integrated mobile hardware and software platform manufacturers and former industry leader?
Releasing BBM on Android and iOS has some people predicting that a leaner BlackBerry could adopt Android, offer a few customized enhancements, and regain some traction in the consumer market. While this is possible, being an Android hardware manufacturer not named Samsung is becoming a difficult proposition, and the hardware BlackBerry brought to the table with BB10 had little to differentiate it from a sea of competing Android tablets and smartphones. Even the physical keyboard, a source of pride and differentiation for BlackBerry, seems to have been panned by the market, making a keyboard-equipped AndroidBerry a niche product.
Another option many people are suggesting for BlackBerry would be abandoning the hardware business and focusing solely on software and services. The BBM release points at an attempt to do so on the consumer end, while a transition of BlackBerry Enterprise Server to a device-agnostic Mobile Device Management (MDM) platform points to a similar move in the enterprise space.
BlackBerry has obvious historical roots in the enterprise, but many CIOs and IT leaders I've spoken to are nonplussed by BlackBerry’s promises to the enterprise, after several years of ignoring that market in favor of the consumer space. BlackBerry also lacks the broad, integrated MDM tools of the larger players, plus internal restructuring and frequent shifts in focus don’t bode well for being able to deliver them in a market with rapidly evolving competition. While BlackBerry once ruled the enterprise, it has largely ceded the device front and now faces a variety of large and upstart competitors in the MDM market it largely defined.
For longtime BlackBerry followers, the least savory outcome of a BlackBerry buyout is that the company becomes a licensing and technology holding company, generating cash from its huge trove of patents but largely bowing out of the race to build new devices and services. With little to offer in terms of new hardware and software, a BlackBerry that’s essentially a patent holding company, with a few dozen employees biased strongly toward lawyers rather than engineers, makes for an attractive buyout for what appears to be a financial services firm rather than a technology or turnaround company.
For consumers and IT leaders, a resurgent Blackberry offered one more competitor in a Google/Apple-dominated mobile ecosystem. Unfortunately for BlackBerry, the delicate balance between releasing a half-baked device too early and missing a market opportunity seems to have become unhinged, with BB10 and the associated devices failing to make a noticeable impact on the market. Even BBM, once the envy of non-BlackBerry owners everywhere, is now entering a field crowded with enhanced messaging services. These signs point to BlackBerry becoming a technology holding company rather than a trendsetter, which is an unfortunate outcome for a company that defined enterprise-class mobile devices.
Patrick Gray works for a global Fortune 500 consulting and IT services company and is the author of Breakthrough IT: Supercharging Organizational Value through Technology as well as the companion e-book The Breakthrough CIO's Companion. He has spent over a decade providing strategy consulting services to Fortune 500 and 1000 companies. Patrick can be reached at firstname.lastname@example.org, and you can follow his blog at www.itbswatch.com. All opinions are his and may not represent those of his employer.