Will BlackBerry's comeback strategy work?
The year 2013 was not a banner year for BlackBerry. After launching its much touted BlackBerry 10 smartphones at the beginning of the year, the Canadian mobility firm failed to get consumer traction with its all-touch Z10 smartphone.
As a result, BlackBerry had to take a charge of up to $960 million for unsold Z10 inventory and announce a 40 percent reduction of its workforce. Rumors began swirling that BlackBerry was up for sale, and suitors, such as its largest shareholder Fairfax Financial Holdings, Chinese computer maker Lenovo, Cerberus Capital Management and BlackBerry co-founders Mike Lazaridis and Doug Fregin, filled the media.
In the end, BlackBerry remained a public company, but replaced its CEO Thornsten Heinz with former Sybase CEO John Chen. At CES this year, Chen made it clear that his company is focusing on its core strength among enterprises and governments.
In a CNBC editorial, Chen explained that his new executive team's "first priority was to focus on our core business drivers, so we had to move to a new operating unit structure: Enterprise Services, Messaging, QNX Embedded business and the Devices business. This structure will drive greater focus on services and software, establish a more efficient business model for the Devices business, and support each unit's transformation and growth objectives."
Chen proclaimed that "when it comes to enterprise, we're still the leader" based primarily on BlackBerry's reputation for security.
In an interview with FierceMobileIT, Jeff Holleran, senior director of enterprise product management at BlackBerry, elaborates on the firm's strategy. "We are focused on what we consider our core business in enterprise in the large and regulated industries, such as financial and healthcare companies and government agencies. We are able to meet their needs for an end-to-end mobility solution that isn't possible with any other mobile platform out there today. We also want to fill the need of the users in non-regulated industries that may have the opportunity to have a BYOD device."
Holleran says that the BlackBerry's focus on the enterprise would not put it at a disadvantage when it comes to BYOD, even though most of the BYOD devices are consumer-oriented Android and iOS devices. "While our focus is shifting back to the core of the business, we still have a platform that provides all of the services that the end users are looking for. A focus area will be to continue to manage all of these different devices."
For non-BlackBerry devices, the firm has launched a product as part of its BES 10 platform called Secure Work Space, which provides segmentation of a secure corporate work space and a non-secure personal work space, similar to its BlackBerry Balance product for BlackBerry devices. "But we can't do a regulated mode [with Secure Work Space] because you can't fully control to the level required when it's not written into the operating system," Holleran observes.
The BlackBerry official challenged the view expressed by Bill Seibel, founder of mobility firm Mobiquity, that Apple would be replacing the enterprise void left by BlackBerry. "When it comes to the regulated users, the 'just good enough' security that was built to meet the minimum threshold of enterprises doesn't cut it. They are looking for the hardened, end-to-end solution that BlackBerry provides."
For me, BlackBerry makes a convincing case that it will continue to be the go-to mobility solution for enterprises in regulated industries, such as financial, healthcare and defense, as well as government customers. But that will confine it to a niche market. For industries where BYOD is widespread and usability is paramount, I don't see BlackBerry making a comeback, either in terms of handsets or enterprise mobility platform. - Fred