Last week, Blackberry hosted an analyst day in San Ramon, in the San Francisco Bay area. CEO John Chen kicked off the event, and he did a great job connecting with the audience, composed of mostly industry and financial analysts.
The big story is that after going through the pain of losing the smartphone market, Blackberry can now say that they’ve successfully pivoted from hardware to software. The financial stats paint the picture—from their fiscal 2016 to 2018, software and services went from being 24% of revenue to 81%, and CAGR for software and services was was 21%. (These are non-GAAP numbers.) They’ve had eight quarters of operating profit, paid down debt, and still have about $2.4 billion in cash, so they’re not in danger of going anywhere.
Just to clear up any potential confusion, you may still hear about BlackBerry smartphones, but they’re made by other companies that have licensed their technology and trademark, not by BlackBerry itself. (One example is the BlackBerry KeyOne, made by TCL.) At the event, they only even mentioned these phones for about five minutes during one afternoon session.
As a software company, BlackBerry has many products, including the UEM software (formerly BES plus the Good acquisition), Workspace (from WatchDox), AtHoc, SecuSUITE, various Android productivity apps, BBM Enterprise, QNX, the backend for RADAR, their security modifications for Android, and more.
BlackBerry’s big message from the analyst day is that they’re in the process of plugging these all into a common backend platform, and as this is happening, they’re shaping themselves into a platform as a service provider. (Or more precisely, a PaaS, SaaS, client-side software, IP licensing, and services provider.) They call this the BlackBerry Secure EoT Platform. (EoT stands for Enterprise of Things, and this is essentially a marketing term that they’re using to describe everything.)
Looking back over the past few years, we saw parts of this strategy taking shape. They integrated the backend of Good into the platform for BES 12, and other products like WatchDox got plugged in, too. Dynamics, which started out as a mobile app management product, evolved into MBaaS, which is really just a type of PaaS. (And now Dynamics does more than mobile.) The BBM Enterprise SDK and service is another example of PaaS. There are plenty of other services that currently are or will be a part of this.
Drilling down on products
BlackBerry did a good job of introducing different product areas for those that may have been unfamiliar.
Our area is obviously BlackBerry Secure and BlackBerry UEM. There’s a lot to talk about, but that will have to wait for another article. For now, I’ll mention that I was pleased to hear BlackBerry Bridge (an app that integrates BlackBerry Dynamics and Intune MAM on the client side) get a lot of attention, and I enjoyed seeing their containerized desktop browsers as a featured demo.
Then there’s BlackBerry’s other client-side technology, including the QNX operating system. QNX is really evolving, and they talked about advanced functionality—for example, using multiple VMs to run different automotive computing workloads.
Another interesting product they showed us was RADAR, their trailer and container management platform, that includes both a hardware device and software. They had some customers on stage, and I could go on and on about it and how interesting the trucking industry is right now. But the larger picture is that RADAR is an example of a product that combines several of their capabilities (IoT, operating systems, connectivity), and while it applies to just one vertical, they could do similar things in others.
Overall, they have a pretty ambitious IoT road map, running the gauntlet from device-level technology all the way up to their own PaaS, as well as integrating with other cloud IoT platforms. As they point out, all of this involves security, encryption, and data transport, which has been their bread and butter for years.
They’re also talking much more about working with partners, who will use both BlackBerry’s client-side IP as well as consume their PaaS offerings.
This is just barely scratching the surface of the products, but just a quick note on connectivity—If you’re wonder in these all using BlackBerry’s NOC infrastructure (this came up at the event), the answer is that today they position it mostly just for high-security use cases.
Strategy, execution, sales, and marketing
I’ve sat through hundreds of vendor keynotes and briefings, and BlackBerry presented a very solid case. Still, there are questions. What’s different now? And will they have the execution, sales, and marketing to avoid stumbling again?
I’ll note that losing mobility to iOS and Android was a one-time event, and they’re past it now. Unencumbered by that business, they should be more flexible. (This is an argument that I made for getting past the consumerization craze a few years ago.) For their part, BlackBerry likes to point out that even when they were a “hardware” company, they were still a software company. (So they’re different, say, than a hardware company that was using Android or Windows as their OS.)
Now they have to sell all this. Carl Wiese, president of global sales, talked about how they didn’t have a software sales force five years ago. Today they have 500 salespeople, and 75% of them have been around less than three years. That turnover might sound bad, but sales at BlackBerry used to mean selling pallets of handsets to telcos, and now it means selling software to enterprises, so it sounds like some fresh blood could be a good thing.
The analyst day was much more about strategy than about marketing, but at one point, BlackBerry did acknowledge that “getting the story out is the most painful part." Almost a year and a half ago, I had some harsh words for their marketing efforts. At the time, they were still somewhat distracted by the tail end of their smartphone business. During most of 2017, they were fairly quiet. I noticed that their blog production scaled back, and in the EMM industry at least, they didn’t come up in conversation nearly as much as their competitors, despite still having a hefty market share.
Now, the pivot is complete and the strategy is in place; it’s time to see how they execute the next phase.