RIM or RIP

Hello readers – it has been a bit of a hiatus, but with so much happening in the industry felt it was time to dust the cobwebs and get back to some good ol’ smart-bytes once again. Today it will be as much of looking back as much as peering into the future – enjoy the read.

In September 2012, I coined in a small post postulating on the future of Blackberry – specifically that their new phones wouldn’t quite cause a dent in the market and the firm would disintegrate if it continued down that path. Fast forward one year and many of those predictions have come true – including the one that Blackberry would perhaps have to move towards a software strategy rather that stick to creating me-too devices.

The question on everyone’s mind is – well, what next; specifically who (if anyone) would buy the firm or parts of it. Over the last few days many names have been bandied about, from John Sculley, to Lenovo and even the original management among others. What is intriguing is who would command the best price – and what would their plan be?

For starters, one must realize what they are getting into. What you end up buying is a company whose back is broken – both in terms of an absence of a concrete road-map as well as the enthusiasm of its employees. The former could be fixed – the latter much more difficult unless a suitor can rally the remaining rank and file within the firm. That being said, Blackberry still has a few aces up its sleeve. It may not be the darling of the masses anymore, but in government circles it is still the preferred device of choice. If Blackberry needs a poster boy to this effect they do not need to look far – President Obama firmly holds on to his device of choice.

In my belief, this presents the first avenue for the way forward. Blackberry has excelled in one thing, and that is security – and the ability to provide it on a global basis. This goes beyond what a common WhatsApp or Viber can provide – and this what governmental agencies all over the world would always pay a premium for. If they are able to come up with a suite of services and applications (perhaps even residing on other devices), this would be immediately an attractive proposition to many. After all, who would say no to a combination of an iPhone or a Galaxy S4 equipped with the secure services of Blackberry.

The second area of opportunity is to move beyond just communications into the machine-to-machine space. Once again, it was a firm like Blackberry who managed to ink deals with carriers around the world to offer global BBM services at a flat rate. Add security and superior compression protocols to the mix then you get a world wide network where machine traffic can flow in a secure and reliable fashion. Given the ongoing trend towards cloud based m2m platforms (from the likes of Ericsson DCP, Jasper etc) the availability of such an underlying framework opens the doors to a whole new set of service providers who can offer global m2m services.

Now – it is difficult to say if either of the paths would be chosen, or if the suitors are simply interested only in its treasure trove of patents, and plan to strip the company of its assets before shuttering it down. For companies who want to enter the “mobile” space and think that Blackberry is their golden ticket – they perhaps should reconsider their options. However, it would be a pity if the company is not given the means and ability to affect a return – albeit as a different software/ service company.

For a company such as Blackberry – I still do think that the old firm still has a couple of tricks up its sleeve; if it were just given the chance and motivation to exercise this freedom.

RIM – a fall from grace

Two news articles piqued my interest last week. First was Marissa Meyer’s (the CEO of Yahoo) announcement that all employees would now be provided by free smart-phones and accompanied data plan. This would be along her priority that Yahoo would have to be a major player in the mobile world by 2015; in order to do so would require that employees use and understand user behavior to create a compelling mobile value proposition. What was telling were the vendors chosen Apple, HTC, Samsung or Nokia….. but no RIM. On top of this Yahoo would now discontinue IT support for the Blackberry platform.

The second was thescripted and belted out by RIM executives for the Blackberry JAM developers’ conference.

I have seen performances, but perhaps never something that sounded so desperate an effort to keep the few developers who haven’t deserted them – as yet. The company has now literally put all its eggs in one basket focusing on the BB10 launch promised for next quarter. If I was a shareholder I would have to ask CEO Thorsten Heins if this is the best punch that he could pack. I am also a bit mystified on their selection of their CEO in the first place – given that he came from Siemens who themselves do not have a stellar track record in this regard and hasn’t done anything radical enough to shake up a company which perhaps desperately needs just that – a different way of looking at their business.

This is just what I will try to postulate; perhaps not rocket science but drawing it up from first principles and positioning it against current competitive trends in this space.

What has been BB’s strength, the USP which drew enterprise customers in hordes during the boom years? It could be summarized as the phone with its ubiquitous keyboard as well as the BBM messaging and email platform offering secure communications prized by enterprise customers. This was the firm belief that this capability would not be replicated and stuck to their strategy over a decade. A decade is light years in the fast moving telecom space. Fast forward a decade later and touch screens are the order of the day with technologies such as swype making typing easier. At the same time 3^rd party companies have come up with compelling solutions which offer similar levels of security but are compatible across multiple platforms and/ or are available at a lower price point. Perhaps they do not maintain the BB legendary watertight server structure but for a majority of the populace this is just good enough. At the same time the shift in behavior has ensured that bring-your-own-device (BYOD) is gaining popularity and enterprises are pandering towards the preferences of their employees who prefer an Apple/ Android phone with thousands of apps to the Blackberry. To its own consternation Blackberry has been unsuccessful in wooing developers its platform – ‘no developers – no apps’. On top of this one USP was the ability compress data in order to squeeze data in older 2G – 2.5G network. With the emergence of 3G/ 4G networks media is now the primary bandwidth hog – email is no longer a red flag item. So now RIM is left with a device which few want, with an app platform which looks like a desert compared to the rest and with messenger and secure email no longer being the preferred service. I will admit that I do not have any deep insights into BB10, but perusing the news and blogs leads me to many skeptics and a few optimists. Perhaps it is drawn from past history with many promises and a track record of under-delivery.

So what could RIM do? On talking to present and past BB users one gets the feeling that although people have gotten past the desire for the handsets (now preferring the iPhone and devices from the Samsung/ HTC universe) there is still an appreciation for the neat and effective BBM and email service. Could RIM drop its pretense of being a device company and migrate along with the rest of the world into being the ‘multi-platform app’ for enterprises. Such an app (or an ecosystem of apps) would leverage the ‘security and trustworthiness’ of RIM, would appeal to the broad range of former RIM BB users who loved the service, but perhaps are now users of different handsets.

Of course, this is no Blue Ocean, but RIM does have the background, the brand and the history to deliver such a service. It would mean a harsh restructuring of the company, but RIM would be able to survive – find its mojo and hopefully emerge as a phoenix in the expanding and lucrative billion dollar mobile enterprise universe

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours