The new year has started with some pretty big tech upheavals. The tech and mobile industry is heaving with new products, new deals, and now new CEOs. Research In Motion, (RIM), makers of the BlackBerry solution, announced on Sunday that the founders and co-CEOs of the company Mike Lazaridis and Jim Balsillie had resigned, and that Thorsten Heins, a former Siemens executive who joined the Canadian company only four years ago would take over as CEO with immediate effect.
RIM was founded in 1985 by Lazaridis, who was joined in 1992 by Balsillie. The latter mortgaged his home and invested US$ 250 000. Under these two entrepreneurs, RIM went on to grow from a small startup in the little known Canadian town of Waterloo, to a global giant in the mobile industry. RIM went on to amass over 70-million subscribers. In regions such as South Africa, Indonesia, and in fact many emerging markets around the globe, the BlackBerry solution and its full feature, low-cost devices, have become a ubiquitous and cost-effective means of communication.
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Corporates around the world still rely heavily on the security, compatibility, and manageability, of the BlackBerry server-based email and communication platform. There is no doubt it’s a good business with a large and diverse user base, and more importantly, there is money in the bank.
So why a change at the top you may ask. The answer is simple — the market wanted, in fact, demanded it. Lazaridis and Balsillie tried hard to avoid the inevitable, but its latest results and the general decline in market share in key markets, such as the USA, finally forced its hand. Since 2007, when the iPhone changed mobile phones as we then knew them, RIM has been on the defensive. The meteoric growth of Android, fuelled in no small part by Google’s email prowess, did not help in any way.
It was clear to anyone who was not involved in the day-to-day operation of BlackBerry, that RIM had lost its fire. What was so remarkable in the early part of the 2000s was completely commonplace by 2010, and in fact others, such as Apple and Google, were doing the job in a manner and style that spoke to most consumers more directly. RIM’s technology and products were no less capable, and its solutions no less effective. What RIM did not see, and what the duo at the top refused to accept, is that the world had moved on. The IT department no longer dictated to its users, the time had come where every user was their own IT department, and demanded that their device, the one they had bought and set up themselves, should be connected to the network offered by their employer.
The sheer technical brilliance of the BlackBerry solution, and its deep roots in the corporate IT department, were now the mill stone around the neck of RIM. It could not move fast enough to keep up with the trends that had emerged, and it was still too small to reinvent its solution overnight. The result was plummeting market share in markets that had real choice, and a share price that has settled below the net asset value of the business.
On the upside, a new broom normally sweeps clean, but as Nokia’s new CEO Stephen Elop discovered, sweeping clean is really really hard, and may well cost more money than RIM, or the shareholders are willing to spend. The challenge for the newly appointed CEO is huge. While the old guard of Lazaridis and Balsillie have effectively resigned, they are not actually going anywhere, and as founders and major shareholders, they may in fact feel far too emotionally invested to actually allow the new broom, Heins, the space he needs for really effective change. Until we see what the new CEO’s strategies actually are, despite his comments of keeping the ship on the same course, we can only but speculate about the future for RIM.
It may be that a fresh pair of hands and some judicious shaking up is all that RIM needs. Its technical abilities, coupled with deep understanding of the mobile environment — and nobody can underestimate its relationships with carriers globally — are massive assets. You also can’t really argue with 70-million users. The trick is to find a way to keep them on board. Many of us in the tech industry are dazzled by the bright shiny newness of all the gadgets we see, and completely lose sight of the fact that for many these are simply tools — Swiss army knives with tons of functions no doubt, but still tools to get a job done. For those users, there may be a place for companies such as BlackBerry.
There is no doubt that the smartphone is fast becoming an essential part of our everyday life, more so in developed markets than the emerging markets. It is however, only a matter of time before the emerging markets catch up. For many, the current race for apps is a short-term one. One that is often presented as another reason why BlackBerry has failed in the market, as it has the lowest number of apps available, and to make things worse developers are not flocking to the platform. Trends tend to come and go, and there is a clear emerging trend to greater integration of functionality with base mobile operating systems, this together with cloud based services, may eventually make the app, as we currently know it, become obsolete.
RIM and its BlackBerry solution has a good chance of revival, its new saviour may be the new CEO, or it may simply be that RIM’s coming technologies anticipate the curve in a manner that their original email platform did back in 1999. I do believe it has the time. Success in technology is, in many ways, all about the supply chain, and nimble execution of strategy, and an operationally focused CEO such as Thorsten Heins may be just the man to do this. The challenge is huge, the rewards equally so. The downside is that the market takes no prisoners, and if the swing does not happen fast, it may actually not happen at all.
