BlackBerry pipe dream to stay enterprise relevant

BlackBerry pipe dream to stay enterprise relevant

Summary: With already a 10 percent in the smartphone maker, Fairfax Financial has put out an offer to buy BlackBerry for US$4.7 billion dollars. The question is why?

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Four years ago, Blackerry--then called Research in Motion--owned a huge chunk of the smartphone market.

z10-blackberry-black

Last week it announced it was laying off half its staff and cutting its device portfolio. Aside from the folks still working at BlackBerry, is there anyone pretending that this doesn't spell the end? 

Apparently Fairfax Financial believes it can squeeze a few more pennies out of the fallen behemoth. Yesterday, news broke that it made an offer to purchase BlackBerry for US$4.7 billion, or about an infinite amount more than what anyone sane would offer.

Okay, there are the patents that BlackBerry owns which I'm sure are worth something, but the belief is that by taking BlackBerry private it gives the company some breathing space and limits its enterprise customers' fears the Canadian smartphone maker is going out of business.

The term "throwing good money after bad" comes to mind. Fairfax Financial already has a 10 percent stake in Blackberry. Buying the remainder, at US$9 a share, to save whatever the company already put into that 10 percent seems ridiculous. 

How is BlackBerry going to gain any traction in the enterprise? No one is going to be buying BlackBerry devices, so its only real product is its server that helps manage devices and messaging in the workplace. Which IT manager would have confidence in BlackBerry's ability to maintain and improve its products? What employee would fight hard to get their BlackBerry supported in the workplace, as opposed to switching to another phone platform?

Go gently into that good night, BlackBerry. It's over.

Topics: Smartphones, BlackBerry

About

Howard spent 14 years in the tech industry working as a programmer, evangelist, and community manager for Microsoft. In 2009, he had lived his "dream" of middle-management long enough and opened a Japanese restaurant called Standing Sushi Bar. Trading in stock grants and software licenses for raw fish and cash, he enjoys mixing his passion for technology into the daily hustle of small business.

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30 comments
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  • It's the BlackBerry Software....

    You wrote:

    "WHich IT manager would have confidence in BlackBerry's ability to maintain and improve its products? What employee would fight hard to get their BlackBerry supported in the workplace, as opposed to switching to another phone platform?"

    BlackBerry makes MDM (Mobile Device Management) software that helps IT leaders manage their employee-owned devices --including Android and iOS devices. Currently 60% of Fortune 500 companies are either already integrating BlackBerry's MDM solution or have it in trials. So, for companies that have trusted BlackBerry for years with their corporate data and are familiar with the BES software, this is a great service from a company with a track record in mobile security. So, it's not just about devices.

    You can learn more about this solution here:
    http://us.blackberry.com/business/overview.html
    lmcdunna
    • Still more pipe dreams...

      "helps IT leaders manage "

      Those in IT are not leaders. They exist to serve their business.

      BES is just a tool. If its maker loses confidence in the market and it's future is uncertain, a diligent IT "leader" has no other choice, but to look elsewhere. Doesn't matter how "good" BES was, or actually... how "bad" everything else has been in comparison... in the past. The world however does not stand still.
      danbi
    • Reliable, unbiased...

      and a great place to look for information on what's really happening with a company that is failing, check the company web site...brilliant. Are they still paying your little team of pro-Blackberry propaganda commenters or are you doing it on your own free time now that you're unemployed?
      Christopher Isto
  • Consumers are about to miss out on a great platform with press like this

    Have you actually seen BlackBerry 10.2 in the hands of someone who has spent more than a few hours with it? It's unfortunate that continual articles like this hide an impressive OS and offering from the general public. With only negative press it's no wonder the average person thinks only negative things instead of having a balanced, objective perspective.

    BlackBerry 10.2 has many innovations that iOS and Android devices do not (and cannot without significant re-writes) and the platform itself supports even more power apps as developers write more and more everyday as well as port their Android JellyBean apps over in minutes. Also, those other highly coveted platforms actually copied many elements from BlackBerry 10, and even to the point of several year old BlackBerry Playbook technology (as seen in the latest iOS 7 app switcher.)

    BlackBerry's demise will mean less innovation for consumers, and ZDNet should be very concerned about that. BlackBerry 10 offers a refreshing perspective, and it's time that the press took a moment to dig deeper into it.
    drkpitt
    • I can agree with you

      But the main problem for BlackBerry is entirely their fault. I saw this coming long ago, they were failing to deliver even before iPhone and android. Their devices were well made, but software was slowly improving and the design (subjective) was far from great. Physical keyboards were dying too.

      I had some hope when they "stopped" for a year to develop BB10, unfortunately they've missed to deliver an appealing range of devices. It was too short (1 touch and 1 keyboard smartphone is all they have with BB10) and the top model was far from being something to rave about. After a year preparing a comeback it was very, very short.

      They still have some enterprise software, but Samsung wants to be a player there and I doubt BB can fight with them - lately they are a set of miserable failures.
      AleMartin
    • Re: BlackBerry 10.2 has many innovations that iOS and Android devices do no

      So does Windows Phone. Now, look at their market share and the lukewarm response from everyone.

      It does not matter what potential benefits your platform has, because let's face it: all platforms have potential benefits, most of which never ever see light of day -- for one reason or another. What matters is what users embrace and the Blackberry has not really attracted much audience, for many reasons.
      One of the reasons is that they went firmly into deals with carriers. If you buy an Blackberry, worldwide, you are likely to sign up for a special "blackberry service". While that service years ago was favorable for messaging, it did not live up with times. Today, the "blackberry service" is times more expensive than simple data service, especially with roaming. So users who do not want to be locked up (by carriers) simply skip the Blackberry, because it essentially has no single feature that another mobile device does not have.

      Blackberry also completely missed the revolution of what Apple did. The iPhone was an demonstration by Apple, that instead of an mobile phone with "smart" features, you are better with an portable computer that can also function as a phone. Android later followed with higher end devices. Sadly, WP, Blackberry and lower end Android missed this, as they were first and foremost phones.
      Instead of bowing to carrier wishes, Apple also twisted their arms forcing them to subsidize the iPhone and offer cheaper and cheaper data plans. For some time, the special 'iPhone data plan' was noticeably cheaper than the 'Blackberry data plan'. Blame carriers? I simply think this is what each of those manufacturers agreed to.
      danbi
      • Special data plan

        While this was true for legacy Blackberry, Blackberry 10 does not require any additional plan unless you with you use regulated mode. Note both Samsung KNOX and Good technology require special data plans for Android so it's nothing new and continues outside of Blackberry.

        While Apple helped drive cheaper plans, the plans are not capped so you no longer have unlimited data. So the carriers still "win". That nice subsidy the carriers pay Apple is being picked up by consumers so let's stop with the "I'm sticking the man" drivel. A world with less choice is not a good one. Could you imagine having 3 cars to pick from? Is this 1918 or 2013?
        MobileAdmin
        • Do you think non-Admins would understand the hardship!!!

          BES 10.x & BB 10 are still relevant and much ahead on the Enterprise market front.., unfortunately consumers are still fascinated with Gold backs then a great piece of tech. #HarshRealitiesOfBeingaTechie
          kunalrim
      • And both are barren wastelands when it comes to the ecosystem

        Blackberry and Windows Phone could have "features" that their competitors won't match for years. It doesn't matter when your marketshare has fallen so low that it doesn't attract developers, and as a result your app ecosystem is a barren wasteland.

        Developers go where the people are - that's been a truth, a law, a rule - since the dawn of programming ecosystems. That goes way back - PC operating systems have demised for the same reason. No one wants a device where the manufacturer is the only one developing for it - particularly one where the developer has shown such incompetence in developing in a timely manner!

        No "feature" you could possibly name transcends it, and it doesn't excuse Blackberry for ignoring it. It doesn't explain why Blackberry's marketshare fell from a once-dominant position to where it is today - and your response indicates that you are also in disbelief over just how and why it could have possibly fallen.

        In other words - I hope you like that "feature" that you somehow justified a purchase decision on - you've successfully ignored everything else that matters in today's smartphone paradigm. Everyone else is nicely working around it, seemingly without pain. Evolution has just occurred.

        Since you don't understand what led them here, you disqualify yourself, your conclusions. And that's not critical, that's logical - you don't get it. Make sense?
        Let's be real - I don't think you'd buy Blackberry stock at this point either.
        geolemon
        • The App Ecosystem ...

          ... is more relevant to the consumer market, but less relevant to the business market, in my experience. The "app ecosystem" to the business market is rock-solid email / calendar / contact synchronization with the corporate mail system and reliable device security. BB is better in that regard from my experience.

          We have "experimented" with BYOD and attached several versions of iPhones, Android phones and Windows phones to our corporate mail, and all of the users gravitate back to the BB devices, except for the sales / marketing team who want to display their use of a flashy new device in front of clients. And even they recognize it's more style over substance.

          Anyone in our company that *needs* a mobile phone and has one provided by us gets a BB, and that isn't changing. BYOD is "great" if you want your employees wasting their time with facebook or twitter or other social media, but for business, BB still wins hands-down.

          And we are not unique in that regard.
          DBRem
          • So your argument is - because it sucks, it's better?

            To recap your statement:

            Basically what you said is this-

            "Everyone has great message and calendar options - these are modern smartphones after all - but we have experience with Blackberry's.
            "And the same reasons that make a Blackberry a terrible consumer choice make it a great business choice - without any good/modern apps out there, we don't need to worry about our users spending time using their phones for anything BUT those great message and calendar apps!"

            And not to read too much between the lines... but really this is also what you are saying:
            "We botched some aspect of the BYOD deployments so badly that users actually found it a better option to carry TWO phones. Can you believe THAT?"
            And also
            "I really don't understand why those sales guys who are always on the move don't want to carry two phones with them..."
            and/or
            "I really don't understand why those sales guys prefer a modern, more capable, more complete device."

            I think you might want to re-evaluate your bias before making blanket statements about being "better". ;)
            geolemon
        • The App Ecosystem

          is virtually irrelevant to the consumer anyway. The "ecosystem" is a marketing tool.

          But do this: Go to the app store and take a look at all the apps that are there. Now look at what each of them are -- a large chunk of them do nothing but redirect you to a website, and an equally large chunk of them are nothing but an outdated, incomplete copy of a website where you can't zoom like you can on your browser. Next, look at the number of downloads of each app. Most of them have only been downloaded a few times, probably just by the friends of the developer. The app store keeps them around as "zombie apps" that exist for the sole purpose of boosting the numbers in the app store.

          But people think "oh, there's more apps, so it's more likely I'll find something I want to use for this purpose." Uh, no. If it's useful, it probably exists for multiple platforms.

          And on that note, Windows 8 with its ability to run *all* legacy x86 apps is the clear winner of the ecosystem battle. But it's not doing all that well -- because the ecosystem doesn't matter, only the user experience and the "hipster" factor.

          Blackberry mostly just sucks at being "hip," and that's their biggest problem.
          Jacob VanWagoner
          • Nonsense

            anybody who has actually used the blackberry store knows better.
            radleym
    • Really

      Would that be the same app switcher that Blackberry copied from the Palm Pre?
      Skullet
    • How?

      Why is the loss of Blackberry mean "less innovation"? Wasn't the reason they failed because they themselves totally lacked innovation and didn't react for 5 years after the iPhone (after which they came out with an iPhone c. 2010)?
      Christopher Isto
  • not much substance, a lot of drivel

    I have to wonder how a piece like this gets past the editors desk.
    laketrout
    • It's not drivel - denial is drivel.

      All that matters is that marketshare has fallen so low that it doesn't attract developers. As a result your app ecosystem is a barren wasteland. There's no excuse for that decline when you once held a dominant position of power in the smartphone paradigm. You must evolve with the paradigm at minimum - if not wield that power of dominance to steer it yourself! They didn't - on either count. They failed to evolve, so they failed.

      Developers go where the people are - that's been a truth, a law, a rule - since the dawn of programming ecosystems. That goes way back - PC operating systems have demised for the same reason. No one wants a device where the manufacturer is the only one developing for it - particularly one where the developer has shown such incompetence in developing in a timely manner!

      No "feature" (particularly ones that don't even fit in today's BYOD world) could possibly transcend that truth, and it doesn't excuse Blackberry for ignoring the reality of today's BYOD world and evolution in the smartphone user demographic itself. Those changes in both professional and personal markets explain why Blackberry's marketshare fell from a once-dominant position to where it is today - your response indicates that you are also in disbelief over just how and why it could have possibly fallen. That should even make your eyebrows raise!

      In other words - I hope you like that you've successfully ignored just about everything that matters to most people in today's smartphone paradigm, in your Blackberry purchase. Notice everyone else is nicely working around whatever obsoleted feature you are clinging to, and are doing it seemingly without pain. Evolution has just occurred.

      Let's be real - I don't think you'd buy Blackberry stock at this point either.
      geolemon
      • *eyeroll*

        Look at the actual data. Look at charts. Blackberry has a bigger market share worldwide than Apple. In the U.S. it's not trending down, it's holding steady.

        Blackberry still has a positive cash flow and carries no debt. They're getting ravaged in the stock market because "manipulators gonna manipulate, haters gonna hate." Since they carry no debt, they don't need the stock market and it's really distracting to them, most particularly to Mr. Heins who should be fired for his incompetence.

        Fairfax is interested in BlackBerry because by taking it private, Blackberry can get its attention off of the "make the quarter marks, long term goals be damned" and focus on what it does best -- delivering superior hardware -- and focus on every other important aspect of the business.

        By the way, I saw this coming about 3 months ago, when Mr. Watson at Fairfax noted a potential conflict of interest and stepped down from the BlackBerry board, and Fairfax's internal audit noted that BlackBerry, according to the books, should be valued at $40/share. I think the "disaster" of last week was a move primarily designed by Fairfax to push the stock value lower so Fairfax could buy at $12/share.
        Jacob VanWagoner
  • BB still has plenty to offer the enterprise

    They still have a decent foothold amongst many enterprises. If they did get their devices out and into the hands of professionals then they would be doing fine. They are spending alot of money to try to get mass appeal again, but just choosing all the wrong avenues, like carrier exclusivity....
    Jimster480