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By | Andrew Orlowski 13th January 2015 10:03

BlackBerry Enterprise chief: Yes, we did leave users behind

Network intelligence - our secret weapon

Interview BlackBerry's previous management left its users behind and underused a vital asset, its enterprise chief told El Reg in a wide-ranging interview.

John Sims is part of the rescue team brought in a year ago, when the Canadian giant was at rock bottom – and was seemingly on the wrong end of every trend in the business.

The company formerly known as RIM had flunked its transition to modern phones and server software (in the shape of BB10 and BES10, respectively). In the opinion of almost every pundit and analyst, the company should have flogged off its assets and carried on as a much smaller software company, in the hope an acquirer would take pity on it and buy it.

It needed to get shot of the handsets business because it could never build a consumer ecosystem around its new BB10 platform. It also needed to get shot of its global network, because nobody wanted proprietary secure mobile email any more, and consumers wouldn't pay a premium for a BlackBerry SIM.

All this would turn a company with almost $20bn annual revenue (in 2011) into one with around $200m revenue a year.

These people giving the advice weren't idiots; it looked entirely rational at the time. But the new turnaround team inside BlackBerry, headed by John Chen and which included Sims (a former Tandem and SAP veteran), ignored it. In the post-Snowden, post-Sony era, security doesn't look like an expensive luxury any more. The internet alone isn't good enough.

So far from being a "liability", BlackBerry's global network – generally referred to inside and outside the company, somewhat misleadingly, as its NOC (Network Operating Centre) – underpins a new range of value-added services. Take BlackBerry's new 2FA or voice conferencing, which wipes the floor with the competition in terms of ease of use – and this is largely because the NOC network layer is adding some intelligence.

BlackBerry continued to invest in the NOC, in BES and in BB10 – the smartphone OS even BlackBerry users didn't seem to want. It's too early to say if these bets are paying off yet, but BlackBerry again looks coherent and well run – and it hasn't looked like that in years.

One of the most interesting decisions was to value the private network positively. The NOC was originally created to service BlackBerry's push email proxy, but it's a global network which has reach into every mobile operator in the world – and Sims told us it would be foolish not to exploit this.

"It represents an asset that very few, if any, companies have. None of the people we get mentioned as being in competition with have a NOC infrastructure, and [they] couldn’t build it. We probably couldn’t if we started today," he says.

"The VPN authentication is just an example of the intelligence that's in the network. We're using the PK ability that's buried in the NOC to provide 2FA. That's just the beginning," he continued. "Over the past three years it’s had substantial investment - we've spent an awful lot of money on the infrastructure. Inside it has the latest big data and analytics capabilities. It was obvious to me and to John Chen that this is an asset we have to do more with."

With a BlackBerry server inside most mobile operators, it made sense to leverage the relationship to flog new services. But Sims said the relationship with carriers had been neglected. With traditional consumer BlackBerrys, operators provisioned a special kind of SIM for the user, charging them a premium.

The customer was happy because in the pre-smartphone era, mobile data was an expensive add-on. The BlackBerry service meant no sticker shock, even when roaming abroad. The operator was happy, because it took a cut, and BlackBerry was happy, as business grew. Yet the relationship had to be restarted so the services could be wholesaled.

"A year ago BlackBerry had lost some of its mindshare with operators. We’ve worked hard this year to win that back. Part of it is devices they think they can sell - but also software they think can sell. Operators are transitioning themselves. The way they make money has evolved quite rapidly to data-driven revenue models. They need to look at doing things with enterprises that drive revenue.

"One of the reasons operators like our enterprise strategy is that all of our products are available to sell on an operator basis. We have connectivity into all those operators - right into the provisioning systems - so we can put things on the bill. Our portfolio has allowed us to significantly improve our relationships with operators around the world."

It isn't true of all operators, Sims admits.

"It’s widely written that in the US we're not on the best of terms with T-Mobile. There’s no animosity, it's just that we just don’t align very well. T-Mobile in the USA is focussed on consumer prepaid users. But in Germany T-Mobile, Deutsche Telekon, is very focussed on the enterprise. That aligns really well," he said.

The channel strategy has also been revamped.

"Before, we focussed on carriers but not too much on distribution. And not at all on online. As we’ve reconstructed, we’ve put emphasis on all these things."

Which means for retail, Carphone Warehouse, for example.

Servers, devices, emerging markets

"Across the world, Ingram Micro, Brightstar, these are, globally speaking, important channels for us. Then there are regional players focussed on a particularly country or subset of countries. We’ve had a lot of push on that. We’re doing some rebalancing in BlackBerry to ensure our sales forces is not some homogenous thing."

“We left a lot of those people behind in the original migration”

BlackBerry's turnaround team also steered its server strategy in a new direction, albeit not as dramatically. Two years ago BES10 was geared around MDM. With BES12, by contrast, BlackBerry recognises that MDM is commoditised. Sims has been here before:

"Years and years ago, I worked for Tandem. And for years Tandem corned the market in fault-tolerant computing. Then everyone released products and called them fault-tolerant. They were never as good as Tandems, but it created a grey area in the market. Today a number of companies say they have an MDM platform - and there’s enough noise there you can’t really distinguish one from another. That battlefield is over."

So if not MDM, how do you differentiate it?

"It's not about managing the device per se, but what goes on on it. Managing the apps, the data profiles, and doing it all in sophisticated ways that bring in location, time of day, time of week – things like that."

BlackBerry is also extending this capability beyond the giant enterprise and public sector deployments to cloud-based offerings sold through mobile operators. The idea, says Sims, is that "multi-tenancy" (as cloud jargon insists we call it) allows the goodies to be usaed by SMEs – although the multi-tenant cloud version of BES12 isn't quite here yet.

"With BES12 we do envisage BlackBerry hosting BES, but also operators and other partners hosting it as well, and reselling the services. Most of the engineering work around the multi-tenant cloud version has gone around the user interface. It's all about the UI. The code behind the scenes is almost identical."

BES12 will offer two admin UIs, a simple and a sophisticated version: "A small law firm, a group of accountants or consultants can selected the dumbed down interface and hide the one they don't care about."

The Big Bang BlackBerrys sucked

And the new Berries themselves? For Sims, they're a correction.

"People are hanging on to their old devices; we left a lot of those people behind in the original migration to BB10. The majority are still there.

"We can see our network - we can see how many older BlackBerrys there are out there. They're in the tens of millions: people who are hanging onto their Bolds, some of them holding them together with tape!"

Now, like the Marines, they're coming to rescue them.

"Classic brings people back to where they should have been. It's giving them some familiarity… I’ve been a BB user since 1998. I remember what it was like. It was a horrendous browsing experience and the app [environment] as well [sic]. The new operating system is a lot more mature now than it was at launch. It’s more feature-rich and solid."

And it runs Android very well – something totally unexpected, thanks to this bit of wizardry. The Playbook and first cut of BB10 had an Android run-time, but today, BB10 executes Android apps native ARM extensions. This allows it far greater compatibility, and allows .APK executables to be installed "in place".

Performance, at least on the Passport, is excellent. But the surprise ecosystem "fix" doesn't mean BlackBerry is going to repeat the catastrophic consumer push of 2013.

"It's tough at the high end, as you say. But if you look at the low end of the market, it’s tough there too: it has been consumed by low end Android phones made in China. It’s going to be hard for anyone to make money at the low end. We have our Z3 device that's wrongly reported to be a 'low end device' - but since we sell it in emerging markets at $175 or so, that’s actually a high end device in those markets. It's going after the professional user in those markets."

So why stay in the devices game at all?

"Devices are important to our customers. Our objective is to make money in devices. that doesn’t mean we need to make a lot of money. Apple makes money not so much just because of the device, but because of the full ecosystem.

"Our Foxconn relationship is geared towards that."

And to critics who say the Classic is expensive? It popped up last week at Carphone Warehouse at £329.99 SIM free, but contains the same innards as the two-year old Q10.

"If you look at the full package people get with BB - not just the hardware, the security, we think it’s a well priced device. We know it is - we know there’s demand there. And it’s generally not consumer demand, it’s generally enterprise-driven demand."

Perhaps the turnaround artistes biggest achievement is that 'BlackBerry is Dead' talk has ceased.

"I would say when we came in as part of the transformation team - the question ’Should BB be part of my strategy?’ was certainly a question people were asking. But over the course of the past several quarters, we’ve shown the company has a long term feature - we’ve said it’s a multiyear path, it’s not a 12-month exercise.

"We’ve done quite well so far in terms of financial discipline, and this year we’ve concerned about getting the product portfolio right. We still think it’s bumpy. We’re not declaring any victory yet. But next year for us is all about growth. Now we have to grow the company again." ®

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