BlackBerry CEO Optimistic For Strong Comeback, But Channel May Be Left Behind


Despite multibillion dollar losses, flopped product releases and bailing executives, BlackBerry CEO John Chen maintains the company can grab hold of market share going forward with enterprise and government spending as footholds to success. However, that might not be good news for the channel, analysts told CRN.

"Today, our company is strong financially, technologically savvy and is well-positioned for the future. In less than two months, my team and I have engineered a new strategy to stabilize the company, return to our core strength in enterprise and security, and maximize efficiencies," Chen said in a CNBC column Monday.

Just over a month ago, Chen grabbed the reins as CEO of the floundering smartphone company. Since he joined the company from Sybase, BlackBerry has posted staggering quarterly losses, with a nearly $1 billion loss in the second quarter and a more than $4 billion loss in the third quarter. Despite that, Chen said in the column that the company has plenty of cash going forward and he expects the company to be profitable again in 2016.

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The key to success will be BlackBerry's enterprise presence, Chen's column said. Chen said that BlackBerry is indispensable in security-driven industries, such as large enterprise and government, giving the example of how the smartphone maker is the only mobile device management (MDM) provider with the "authority to operate" with the Department of Defense.

However, that recovery might not be good news for the channel, analyst Jack Gold, president and principal analyst at J. Gold Associates, told CRN. Gold said that BlackBerry needs to focus on re-engaging and re-enlisting large enterprise customers, and the way to do that is through direct, not the channel.

"The channel is effective for them potentially for SMB, maybe in local government, so they won't lay off the channel, but I think in the short term their concentration really needs to be in direct. That's where the big numbers are," Gold said.

BlackBerry has already lost out in the consumer space to Apple and Android, Gold said, but it still has a fighting chance in large enterprise and government because those areas are willing to pay a few extra bucks for security and services such as enterprise device management (EDM). According to government research firm Govini, the federal government shelled out $40 million for BlackBerry devices this year, a drop of 57 percent from 2011.

"They've lost the consumer space," Gold said. "Enterprise and government is where they have to focus with a really sharp aim. That's really the only chance they've got of stemming the defections, because that's who's left."

Jeff Kagan, an independent technology industry analyst, agreed that enterprise was the way to go for BlackBerry, even without the channel, and said he is hopeful for the first time in a long time that, with Chen at the helm, BlackBerry can make a recovery.

"I think that they should look back in their history books and go back to what they did six years ago, eight years ago. If they change, it's a crap shoot; if they go back they’ll be successful," Kagan said, suggesting the company step back to earlier, more popular, models like the BlackBerry 7.

In his column, Chen wrote that BlackBerry's global customer base for enterprise holds more than 80,000 clients, which he said positioned the smartphone maker as a leader for MDM going forward.

"When it comes to enterprise, we're still the leader. Don't be fooled by the competition's rhetoric claiming to be more secure or having more experience than BlackBerry," Chen wrote.

Kagan said he can see a rebounding BlackBerry, but only if it focuses on giving "hardcore BlackBerry lovers" what they want and ramping up marketing efforts to reel in new enterprise-level clients.

"That's the first time I've said that about BlackBerry in years. I have hope," Kagan said. "But I'm not holding my breath."

PUBLISHED DEC. 30, 2013