31
Mar

BlackBerry Reports On Its 4th Quarter, 2014 Business Results

On Friday, March 28, 2014, Blackberry reported 4th Quarter, 2014 Results. In his opening remarks, John C. Chen, CEO informed his audience ” . . . [he is] extremely pleased . . . ” with the quarter results, which placed the business ” . . . slightly ahead . . . ” of objectives. I should note Chen alluded to an “8 Quarter Plan”, which was laid out in the Q3, 2014 Earnings Presentation, which was his first earnings call subsequent to taking over as CEO of the business.

By noon on Saturday, March 29, 2014, a lot of analyst commentary had been published on this earnings call. Most of the published copy focuses on the real impact of the earning surprise included in the results: Analysts estimated Blackberry would report a loss of $ .55 per share, but the actual reported loss amounted to $ .08. On the other hand, revenue was substantially below analyst estimates, coming in, for a first time since 2007, at less than a $1 Billion. Markets paid more attention to the revenue miss, and Blackberry’s stock dropped 7.07% for the trading day, closing at $8.41.

In my opinion, market response to Blackberry’s reported earnings revealed investor impatience with Chen’s plan to transform the business. Chen was “extremely pleased” with the results, but markets sold off on the stock. If this disconnect is not somehow repaired prior to Blackberry’s Q1, 2015 earnings call, “longs” like me should brace themselves for a repeat sell off.

Here are some points I put together as I listened to the webcast:

  1. Analysts clearly expected Blackberry to not only report a successful effort to substantially reduce the quarterly loss (the first objective of Chen’s 8 Quarter Plan), but also report a floor in corporate and consumer sales capable of fueling a $1 Billion + revenue run rate while the business continues to address its cash flow and profitability problems.
  2. Chen’s comments on the “Bold” Handset, and the soon to be released “Classic”, demonstrated precisely the type of highly reactive, flexible, “Ready, Fire, Aim” approach someone in his position needs to maintain. Unfortunately, subsequent to this call, and Chen’s appearances on CNBC and Bloomberg TV, a number of writers theorized how his remarks actually indicated a departure from his stated objectives to transform the business from a hardware mobile device handset manufacturer, into an enterprise ISV. Chen repeated, on a number of occasions, his willingness to sell products customers “ask for”, which, in my opinion, makes perfect sense.
  3. The Jakarta debut, scheduled for early April, should provide anyone following Blackberry with some highly valuable indication of whether Chen can shore up handset sales as he continues to address the task of transforming Blackberry’s sales force into a direct-to-enterprise team, and his channel partnerships into something more profitable for the business.

Chen clearly understands the need for specific focus on successfully attaining very near term future objectives. It would certainly help if analysts, and, perhaps, investors also dropped a big picture view for something a lot grittier and grimey — making it through the next few business quarters.

Disclaimer: I’m long Blackberry.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

28
Mar

Comments On Satya Nadella’s Presentation on the Intersection of Cloud and Mobile

On March 27, 2014, Satya Nadella, Microsoft’s CEO presented a summary of Microsoft’s concept of the intersection between cloud and mobile to the press in a webcast lasting a bit longer than a half hour. The title of this webcast is simply Satya Nadella press briefing webcast, but, in my opinion, Nadella used the opportunity to extend on themes introduced when he assumed the position of CEO for this mature ISV. Anyone following Microsoft® with a half hour to spare should benefit from viewing the recording.

One of the most important of these themes is innovation, which Nadella mentions barely more than a minute into the presentation: ” . . . . our customers want to know what is our innovation agenda . . . ” He notes ” . . . the team is really ready for it . . . ” When this observation is put together with a fragment from Nadella’s preface, where he observes he’s only been in this position for fifty two days, one can readily see how Microsoft has used little more than 5 weeks to mount a credible market message about a business, once a follower of a set of leaders, to one recently added to the leadership ranks, running at the head of the pack.

Nadella goes on to introduce two new slogans: “ubiquitous computing” and “ambient intelligence”. My immediate reaction when I heard the first of these was to flash on some comments made by Larry Page during his last Google Quarterly Earnings Report, where he spoke of what I would summarize as a “proliferation of screens”.

Perhaps its safe to say the same thread runs through both of these visions of a near term future computing paradigm: for Page, more and more segments of human interaction take place over “screens”, at the same time, these “screens” likely provide the crucial conduit for software to enter daily life for Nadella, and, the “ubiquitous computing” opportunity resulting from this congruence creates ” . . . an amazing canvas for innovation and amazing opportunity for growth for our company”.

If Page and Nadella both share this same view, albeit from different vantage points, is it safe to say Microsoft plans on challenging Google on a much more panoramic field than simply search, or even Apps?

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

27
Mar

The White House is Evaluating Samsung and LG Phones, But is this really a blow to Blackberry?

On March 20, 2014, Will Connors published an article on the Wall Street Journal Online titled BlackBerry Suffers Blow as White House Tests Samsung, LG Phones. As the title plainly states, Connors considers this review of competitive smart phones to be a negative for Blackberry. But is this a really accurate read of this news?

I found neither any mention in Connor’s article of any apparent interest, on the part of the White House in any alternative to Blackberry® Enterprise Services (BES), nor in Blackberry Secure Work Space (BSWS) for iOS® and Android. Unless and until there is mention of the White House seriously considering a move off of these software platforms, I don’t see news about the White House evaluating new smart phones as a blow to Blackberry.

On March 26, 2014, Blackberry announced its achievement of ” . . . Federal Information Processing Standard (FIPS) 140-2″ for both of the above mentioned secure messaging platforms. Readers can review the entire press release, titled BlackBerry Advances Security of its Multi-Platform Mobility Portfolio with New Cryptography Certification. BES and BSWS operate entirely correctly on any Android devices, including the Samsung and LG smart phones currently under review by the White House. With specific regard to the LG smart phone line, on December 18, 2013, Blackberry published a press release, titled BBM To Come Preinstalled On LG SmartPhones. So the LG G Pro Lite runs the Blackberry Messaging Platform, native, right out of the box. The White House statement, however, does not specifically mention this LG smart phone as under specific consideration.

Readers should also carefully consider a December 20, 2013 announcement: Blackberry and Foxconn Agree a Five-Year Deal. Is Blackberry really deeply committed to the smart phone handset manufacturing business? Or is this interest on the part of the White House merely an indicator of Blackberry successfully transitioning over to the enterprise software revenue model John Chen, CEO has made clear is its near term future?

BES and BSWS win any way the White House decides to proceed — Android smart phones from Samsung, or LG, or new Blackberry handsets manufactured by Foxconn.

Disclaimer: I’m long Blackberry

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

26
Mar

Should Online Security Procedures Run Independent of Users?

Recent disclosure of additional details about the highly publicized compromise of Target’s customer data repositories support an argument for less manual effort to operate methods of securing confidential, user specific data, across online communications. Is this argument plausible? and, if the answer is yes, then to what extent?

I think the best answer to this question is a qualified “yes”. Perhaps online security best practices should be revised. It may make sense to remove the user from the direct application of single sign on technology as cloud, SaaS processes are consumed. If the authentication step can be handled with greater precision, and success, by delegating the actual management of logging into, and then out of a host of applications to another piece of software — another SaaS dedicated to securing the exchange of online credentials between applications and specific users — then, this argument goes, we can have more confidence in at least this step in the online systems processing experience for typical SaaS users.

Identacor is an example of a SaaS targeted to the identity and access management market. These consumers need a better method of managing credential exchange between users and SaaS processes. I recently spoke with Sandy Dalal, CEO of Identacor. Anyone visiting the Identacor site will note the importance of a unique markup language, Security Assertions Markup Language (SAML), to the Identacor solution. As Dalal sees it, implementing Identacor on a SAML core directly satisfies a growing SaaS user requirement for a method of actually removing passwords, altogether, from an online authentication process. Once passwords are relegated to a less important role in the process, then the administrative burden is reduced, as well.

But Dalal explained Single Sign On (SSO) is simply a part of the solution Identacor offers to its customers. He let me know Identacor is ” . . . really in the business of managing [our customers’ online] identities. From the time an employee, or even an external partner joins your company, to the time they leave your company, in all the, sort of, life-cycle access security events transpiring from this association, we can help secure that . . . ”

Identacor has been built with hooks to popular human resources management SaaS offers (he mentioned Workday). He claims these hooks can be used to remove access rights to important, organization-specific applications, as required, as personnel transition out of a client’s company. These hooks operate entirely transparent to the user.

If, as it presently appears, poorly architected, managed, and, finally, implemented, operational risk management controls where at the center of the Target hack, then systems like Identacor are worth a close review by any business looking to remove some of the human factor from these online interactions.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

25
Mar

EMail Marketing for Small to Medium Sized Businesses Shows Some Troubling Signs of Diminished Usefulness

My recent experience, on behalf of clients, tells me email marketing remains one of the most important online promotional tools available to Small to Medium Sized Businesses (SMBs), here in the US.

But I’ve noted some technical limitations, which lead me to recalibrate, upwards, the amount of effort required to put together a truly productive email marketing campaign for SMBs. It may be helpful to frame the obstacle as follows:

Email marketing is no more, no less than a method of engaging with market participants who, at some level, should be considered sales prospects. So the only meaningful performance metric I know of for this type of campaign is the number of responses received from recipients.

If an HTML email marketing campaign touches 1K recipients, but stimulates only 5 responses (1/2 of 1% response rate), then, it is surely safe to conclude the campaign required a considerable amount of effort vs. the return. An SMB with a 15K email address database can only run a campaign, like the above, 15 times. If the pool of responses at the conclusion of all 15 campaigns amounts to only 75 responses, and sales closes 5 – 7 $10K orders from all of the effort, then it may be safe to conclude the return on investment is marginal (of course all of this depends on the annual revenue produced by my hypothetical SMB, average sales price, etc.).

Usually, I will advise a client to then look to a tool like VisualVisitor, which can be configured to identify web site visits resulting from a click on a special hot link included in an HTML email message, to point out recipients who opted to visit a web site in lieu of actually responding to the email message. This method exposes additional opportunities for sales teams. The additional benefit from this approach can be considerable.

But HTML emails are required to obtain the added benefit from implementing links with VisualVisitor tags. In my opinion HTML emails contribute, substantially, to recent ineffectiveness of email marketing campaigns for my clients. Markets are looking for a personal email message, which is best achieved with plain text. I haven’t yet experimented with adding VisualVisitor tagged links to plain text email campaigns and have no plans to do so in the near future.

I do plan on speaking with the technical team at VisualVisitor to see if there is any precedent here. In other words, has anyone used the tags in plain text email messages? If you have an interest in this topic and would like to follow it, please contact me.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

24
Mar

Does it Make Sense for Enterprise IT to Serve Their IDE Needs from SaaS in the Cloud?

On February 28, 2014, the CloudShare Community Blog published Chris Riley’s interview with Ken Walker of IBM®. The topic of the discussion was the recent increase in enterprise business interest in serving their needs for Integrated Development Environments (IDEs) from the cloud, and the rationale behind it.

Walker voiced his opinion on the rationale as follows: “The capabilities of SaaS and PaaS platforms and the power of the underlying JavaScript runtimes in every browser are at the tipping point where there’s no point in Developers maintaining private tool chains on their own machines.” (quoted from a February 28, 2014 interview of Ken Walker of IBM by Chris Riley of Cloudshare. A link to the full interview is published above).

Add to Walker’s opinion a recent substantial change in direction for the Microsoft® development model for its Office products, and enterprise business will likely find a lot of reasons to seriously consider cloud SaaS offers, as they grapple with just how best to provision IDEs for organization-specific requirements for custom software.

If these same enterprise IT organizations have already decided to reduce their expense for new desktop software by implementing Desktop as a Service solutions like VMware’s “Desktops in the Cloud” notion, then developers may find lots of reasons to abandon desktop computers with lots of RAM, very fast solid state drives, and numerous Virtual Machines (VMs) for thin clients persistently connected to the Cloud IDEs Walker and Riley discuss in their interview.

Anyone with an interest in following this trend will want to closely review sales reports from leading, publicly traded PC OEMs. Any substantial drop in high end PCs may indicate increased use of Cloud IDEs by enterprise-class businesses.

Just a note on the changes Microsoft introduced with its new 2013 development model: the development emphasis for the Office 2013 components, including SharePoint on premises and in the cloud via Office 365, is squarely on JavaScript (and the Open Source jQuery project) and HTML. I think this change is, potentially, very good news for business customers looking to bolster server defenses against online security threats.

In theory, when processes are written for browsers, the need for trusted solutions dependent on server cycles diminishes. Of course, every custom trusted solution brings its own security risks, which can then become threats to the server, itself.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

21
Mar

The Microsoft Cloud Promotional Campaign Debuts Without a Formal Introduction

Microsoft has debuted a new promotional campaign, ‘The Microsoft Cloud’. This campaign is targeted to the core of Microsoft’s customer base — enterprise business. The campaign includes a highly integrated set of customer testimonials, position statements, and presentations of components of the solution.

This campaign launched with little formal fanfare, breaking with what has come to be Microsoft’s “typical” approach to introducing a new set of marketing concepts. So the campaign has, to date, successfully avoided the usual critical reaction from popular media. Of even greater importance, rather than foisting “Microsoft’s” version of popular computing concepts, this campaign simply starts with a familiar presentation on cloud computing and merely brands it as “Microsoft’s” cloud. The campaign breaks further from the recent past with a very clear focus on enterprise business prospects and their need for hybrid clouds, which amount to an integration of on premises computing systems –SQL Server, Windows Server– with Office 365. Promotional content is highly integrated with product presentations juxtaposed with client testimonials and even success stories.

The theme of the campaign includes four components:

  1. Insights
  2. Productivity
  3. Social
  4. and Platform

1) Insights

Insights amount to analytics, and include Microsoft’s BI offers, CRM, and Power BI for Office 365. But on premises BI solutions, including SQL Server 2012 and SQL Server 2014 are also promoted. Microsoft’s new embrace of 3rd party computing platforms (for example, the announced port of Office to the Apple iPad device platform) is represented in the Power BI presentation with a presentation of how Power BI can be connected to SAP Business Objects.

2) Productivity

The “Productivity” presentation is all about Office 365, with no mention of SharePoint anywhere in at least the first 4 screens I reviewed. There is no on premises solution included in this plank of the Microsoft Cloud solution. But there is a section devoted to the “Office 365 Trust Center”, ostensibly to persuade enterprise prospects on the security of the Productivity computing platform.

3) Social

Once again, I found no mention of SharePoint within the first few screens of the “Social” presentation, which is filled with a lot of information about Yammer, and a new set of “Social CRM” capabilities, which are built on the CRM product.

4) Platform

The last plank of the solution, Platform, is a lot about Azure, but also very much a position statement on the notion of “hybrid cloud”.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

19
Mar

Intel’s Reference Design for 64-Bit Smart Phone and Tablet Computers Attracts Positive Reviews from Mobile World Congress, 2014

Intel hasn’t enjoyed much success in the mobile market for smart phones and tablets. But on February 24, 2014, in a press release titled “Intel Gaining in Mobile and Accelerating Internet of Things”, Intel announced the launch of its ” . . . 64-bit Intel(R) Atom(tm) processor for smart phones and tablets . . . ” (quote is an excerpt from the press release). A reference design of a smart phone built on this processor and board showed up at Mobile World Congress. This prototype, running the Android KitKat OS, was well received by reviewers at the conference.

One of the reviews, Intel Merrifield Smartphone Reference Design, was published by Mobilegeeks.de. on the same day the Intel® published the press release for the 64-bit Atom solution. On several occasions the Mobilegeeks reviewer notes what she takes to be a major improvement in the product (as compared with Motorola’s Razr i, I would suspect), specifically the shorter length of the phone, which permits one hand gaming. There are quite a number of these reviews online. I did not find any strongly negative comments on the reference design.

So, if the mobile community actually warms up to this platform, what’s the impact for Intel? In my opinion, a right answer will be, necessarily complex. It’s certainly a positive to have a well received reference design, but the announced list of OEMs (ASUS, Lenovo, Dell and Foxconn) for this chip solution, with the exception of Leonovo (and only as the result of its plan to acquire Motorola Mobilty from Google), have zero footprint in the consumer smart phone manufacturing market. In my opinion the absence of a leading smart phone manufacturer will be a very hard obstacle for Intel to overcome. The choice to build the reference design with an Android KitKat OS will likely exclude Nokia from the list of likely targets for the platform.

Therefore it makes sense to assume, perhaps, three quarters of minimal sales for this product line as a significant smart phone manufacturer comes to the surface. At the same time each of the announced OEMs offers several table computing products. Expect to see the 64-bit Atom chip solution, with the Android OS, popping up in some tablet designs.

But HP (conspicuously absent from the above list of OEMs) just released two tablets with the 64-bit Atom processor, BayTrail, running Microsoft® Windows 8.1. You can read a review of the tablet in an article published on the PC World web site, titled HP ships first 64-bit Windows 8.1 tablets with Intel Atom. So it’s clear tablet OEMs on the Windows OS side of the market are keen on the 64-bit Atom BayTrail cousin to this solution. These sales will likely ramp up faster, but for a smaller overall market (focused on business end users).

Disclaimer: I’m long Intel.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

18
Mar

Short Life for Asus Transformer Speaks to Product Marketing Mistakes

On February 25, 2014, AMD published some news about its APUs: AMD and BlueStacks to Bring New Dual-OS Android Solution to Retail. BlueStacks, the manufacturer of the BlueStacks App Player product, had developed hooks for PCs and tablets powered by AMD APUs. These hooks were designed to provide retail PC consumers with a seamless experience, side by side, of Microsoft® Windows and Android computing environments.

Before analysts following either AMD or BlueStacks starting applauding, perhaps it’s worth the time to consider a recent attempt by a PC hardware OEM — ASUS — to bring to the consumer IT market the Transformer All in One P1801 and P1802 products, which provide the same capabilities. Note: the ASUS device neither uses an AMD APU, nor does it use the BlueStack App Player. But the functionality is certainly achievable with a combination of the AMD APUs and the BlueStack App Player.

In an article titled Microsoft and Google aren’t happy with mutant Android-Windows Hybrids, which was released only 17 days after this announcement, Ian Paul wrote for the PC World website: “Microsoft may be comfortable with Windows Phone and Android splitting time on a single phone, but when it comes to PCs, fuhgeddaboutit.” (quoted from Ian Paul’s article. I’ve provided a link to his entire article earlier in this paragraph).

Why would Microsoft, or, as Paul recounts, Google, care about a PC device, like Asus’, running dual OSs? After all, PC power users often run Linux virtual machines on Windows PCs? Rarely, if ever, have there been any notable objections from Microsoft or any of the Linux distributions about users compromising functionality by opting for dual mode hardware operation.

The difference here is the how the firmware for the Transformer AIO P1801 and P1802 changes the consumer experience. There is no software to run to change OSs on the ASUS device. Paul explains: “These devices run Windows when they’re in PC mode. Slide out the AIO’s screen or flip the laptop into a tablet, however, and boom! You’ve got an Android slate. The concept is theoretically appealing to users since you get the best of both worlds in one device, but Microsoft and Google apparently weren’t pleased.” (ibid). The tablet included in the product is powered with an NVIDIA Tegra® 3 CPU, while the PC is powered with an Intel® i5 CPU.

What’s important here is what looks to be a big miss by product marketing. Clearly ASUS’s product marketing team didn’t consider all of the implications of the Transformer P1801 and P1802 devices. Product marketing should have anticipated the likely reaction of Microsoft or Google to the performance of the proposed product. It’s disappointing, to me, to see how a mature PC OEM like ASUS could miss this very important point.

The lesson for early stage ISVs is to make sure product development procedures include a summary of how a proposed product will impact other software products in use in a consumer’s likely computing environment. Part of the summary should be devoted to a presentation of the “burning needs” these other software products are designed to meet.

Using the above mentioned mistake, as an example, what I think was missing from the ASUS product marketing plan was any reasonable assumption of why Microsoft would certainly want Windows 8.1 to run on the tablet feature of the dual OS hybrid PC computing device, and not just on the PC.

It will be interesting to see how hardware OEMs respond to the availability of the BlueStacks App Player and AMD APUs combination.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

17
Mar

HP Introduces 64-Bit Tablets, but are the Price Points Too High?

Intel® 64-bit Atom processors in a BayTrails configuration provide the processing power behind HP’s new ElitePad line of tablets for business computing.

The début of tablets running Windows 8.1 o. 64-bit processors is certainly a significant event for Intel, which promised accelerated efforts to beef up its presence in the mobile computing markets for tablets and smart phones.

But each of these tablets, with WiFi and Cellular data communications capabilities, carries a retail cost of at least $909.00, which makes any of the models more expensive than even Apple’s iPad Air tablets (the iPad Air with 64GB and comparable data communications capabilities carries an online price, via the Apple Store of $829.00 as of March 19, 2014). The effective price penalty, baked into the HP ElitePad, is not a promising development for Intel. I’m not sure whether the higher price is the result of HP passing through higher cost for 64-bit Atom/BayTrail solutions onto the consumer, or not, but the end result will likely be the same — anemic sales for these tablets.

PC World recently published an opinion on these tablets. In an article written by Agam Shah, titled HP Ships First 64-bit Windows 8.1 Tablets with Intel Atom. Shah published an estimated retail price of $739.99 for the basic model, which I did confirm on the HP SMB web site.

Competitive pricing is certain to be critically important to the success of Intel’s efforts to establish a position in the 64-bit tablet market for CPUs. Apple clearly owns the high end of the BYOD business market for these tablets. I would argue even the HP Elite Pad price mentioned in Shah’s review, $739.99, is still too high. Neither Intel, HP, nor Microsoft will benefit when the cost, for business users, to enable BYOD hardware with a native Windows 8.1 OS, exceeds the cost of the present market leader (let’s not forget the iPad Retina Mini, which includes a 64-bit processor, Wi-Fi and/or cellular connectivity, and 64GBs of storage at a retail price of $729.00). I would argue the Windows OS, while certainly a potentially valuable feature, is not critical for business consumers using Software as a Service (SaaS) cloud offers.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved