2
Sep

MobileIron Promotional Content Depicts a Mobile First World

Perhaps Microsoft’s CEO was not far off when he articulated a new vision of a Mobile First Cloud First world back on March 27, 2014. This writer paid a visit to MobileIron’s website and found very similar themes running through a short promotional video exposed on the site, which provides an overview of the imperatives driving MobileIron solutions.

MobileIron offers a Mobile Device Management (MDM) solution. This MDM solution has been included in Gartner’s Magic Quadrant for MDM. Most recently, Tiernan Ray of Barrons reported on analyst comments about MobileIron, which were attributed to Karl Kierstead of Deutsche Bank. According to Ray’s report, the availability of MobileIron, together with Apple’s next release of iOS (iOS 8, rumored to make its debut in September of this year), spells trouble for BlackBerry, and may hasten the pace at which large organizations migrate out of Blackberry’s BES.

A number of posts to this blog have been concerned with BlackBerry’s BES and the enterprise market for MDM solutions.

Readers interested in important technology themes running through the marketing communications efforts of ISVs should make special note of how Nadella first articulated a number of themes now carried forward by Microsoft competitors. Microsoft is a recent entry to the MDM market place via its Enterprise Mobility Suite. Perhaps it makes sense for MobileIron to address the same themes in its video. If nothing else, the reverberations point to the credibility of the points Nadella made back in March of this year.

During its recent IO event for 2014, Google added further credibility to Nadella’s presentation during a segment speaking to productivity. The same claims Nadella made for Microsoft software, and its objective to empower its customers with the most efficient methods of attaining optimum productivity, were made for the Android platform.

The reverberations are not, in and of themselves, particularly important. What is important is how they affirm the relevance of these themes for consumer and business computing in 2014. “Mobile First, Cloud First World” is not only a sophisticated juxtaposition, in rhetoric, of images and the “world”. It should now be considered an accurate portrayal of how consumers and business users accomplish their computing tasks.

Ira Michael Blonder

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

14
Aug

BlackBerry BES wins at U.S. Defense Information Services Agency

On August 6, 2014, Blackberry announced the U.S. Defense Information Services Agency (DISA) had approved its Secure Workspace for iOS(R) and Android(tm) solution at the level of DISA’s Security Technical Implementation Guide (STIG).

In this writer’s opinion this win is notable for three reasons:

  1. The win demonstrates the strength of an entrenched device and its supporting platform for enterprise businesses and comparably sized organizations (such as DISA) in the public and not-for-profit sectors
  2. Despite BlackBerry’s position in the “Niche” quadrant of Gartner’s Magic Quadrant for Mobile Device Management (MDM), DISA opted to approve this solution, apparently unconcerned about the position of this platform, relative to its competitors in the market place. DISA’s decision may include important clues about how U.S. Federal agencies may buy technology solutions in the future
  3. The win is, perhaps, a blow to Samsung’s Knox Enterprise Mobility Management. Given the role Google apparently intends Knox to play in its efforts to repackage Android for enterprise consumers, this win for BlackBerry may have implications across a wider range of enterprise opportunities

1) It is very difficult to unseat an entrenched incumbent

The BlackBerry press release about this win does not include specific detail about how DISA decided to approve BlackBerry’s solution, but it is likely safe to surmise the large installed base of BlackBerry 10 mobile phones played some kind of role. On the other hand, the press release does mention BlackBerry’s Global Enterprise Services group. So the win may be emblematic of the quality of customer account management this group has achieved as it has worked with DISA

2) The Magic Quadrant May Not Be What It Seems When It Comes Down to Costs

Enterprise computing is highly complex, with a rich set of influential factors. As mentioned above, without further detail, it is no more than pure conjecture to posit answers to questions as to how DISA went about making its decision to approve BlackBerry’s solution. But it is likely cost had something to do with it, as is often the case. Perhaps the cost of implementing a best-of-breed solution for Mobile Device Management (MDM) far exceeded the cost of consulting with BlackBerry to bring its solution up to compliance with STIG. Bottom line: this win demonstrates how vulnerable an argument built on no more than authority (meaning pointing to the position of a couple of products in a market study like Gartner’s Magic Quadrant) can be when long standing customers weigh the pros and cons of making a platform change and funds are tightly controlled.

3) Samsung’s Knox is, perhaps, not as formidable as its namesake

As written in several older posts to this blog, Google’s I/O event for 2014 included the presentation of what this writer took to be a serious effort to repackage Android into a platform more worthy of serious consideration by enterprise IT organizations. A segment of the enterprise presentation at this event included an announcement of Samsung’s decision to make Knox available to the entire Android developer community. So this win by BlackBerry may put a damper on the enthusiasm driving this enterprise IT initiative for the Android developer community.

Ira Michael Blonder

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

26
Jun

Blackberry is Turning Around, But at a Slower Pace Than Previously Expected

Blackberry reported on earnings for the first quarter of fy 2015 on Thursday, June 19, 2014. As reported on the MobileWorldLive web site, John Chen, CEO, mentioned a likely return to profitability in fy 2016. But the pace of improvement is much slower than expected, based on management comments from earlier earnings reports.

Does the gap between the timeline Mr. Chen presented back in December, 2013, as part of his presentation to investors, and his latest pronouncements present a challenge for anyone following the performance of this business? Back then, many proponents of Mr. Chen’s ascendancy to the CEO position at Blackberry spoke positively of his past successful experience turning around Sybase, and seemed to look forward, eagerly to the second phase of his plan — marketing BlackBerry’s Messenger service to the market for enterprise mobile device management (MDM) software.

But, as I wrote earlier to this blog, Gartner has since released its Magic Quadrant for Enterprise MDM. Unfortunately, BlackBerry’s BBM is included, simply, as a “niche solution”, and certainly not one of the market leaders, at least according to Gartner.

So we can only conclude the first phase of Mr. Chen’s December, 2013 plan is still in process. Ken Willard, who wrote this article for MobileWorldLive notes “[t]he remainder of sales was made up by hardware (39 per cent) and software & other revenue (7 per cent).” On the other hand, the services business (not a focus of Mr. Chen’s December, 2013 plan) “represented more than half of Q1 turnover (54 per cent).”

In fact, it looks much more likely Mr. Chen will remain deeply engrossed with the challenge of squeezing profitability out of the hardware business at Blackberry for the next few quarters. Mr. Wieland quotes Mr Chen as using an abstraction to describe the pace of BlackBerry’s progress on this objective, “Chen admitted that BlackBerry had still to hit breakeven point on hardware, but added it was getting ‘very close’.” What may be very close for Mr. Chen maybe very far off for investors. Perhaps it is safe to say simply reporting the numbers, and leaving the task of “connecting the dots” to analysts would have been a better approach.

Disclaimer: I liquidated my entire investment in BBRY back in May, 2014

Ira Michael Blonder

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

27
May

BlackBerry Included as a Niche MDM Solution in Gartner’s Magic Quadrant for Mobile Device Management Software

As I wrote earlier in this blog, Blackberry’s recent promotion of free Blackberry Enterprise Service 10 (BES10) to anyone willing to try the product, did not seem fitting for a leader in the enterprise Mobile Device Management (MDM) market. I based my point on some information shared, publicly, by Gartner, during a recent webinar on the enterprise Bring Your Own Device (BYOD) trend. The information reported on a willingness on the part of a substantial majority of survey respondents from enterprise businesses to invest in an MDM solution.

My reasoning amounted to questioning why Blackberry would give BES10, which is an MDM solution, away for free if approximately 80% of the enterprise market plans on buying and implementing a solution. Based on this giveaway, I concluded Blackberry has faced some substantial obstacles in its effort to convince enterprise business to standardize on its MDM offer.

This apparent setback was confirmed, recently, when Gartner published its Magic Quadrant for Mobile Device Management Software. BlackBerry is included in the lower left square of the Magic Quadrant — as one of the “Niche Players” in the market.

This result is, in my opinion, an important signal of some problems in the strategy John C. Chen, BlackBerry’s CEO presented to the analyst community back in December, 2013. Mr. Chen notified the analyst community of his intention to transform BlackBerry into an enterprise software vendor, while, at the same time, lowering the company’s exposure to the mobile smart phone manufacturing business, which exhibits the characteristics of a pure commodity market.

If BES10 can do no better than achieve a slot as a “Niche Player” in the enterprise MDM market, then BlackBerry’s giveaway strategy makes sense. At least Mr. Chen should achieve wider awareness of what BlackBerry offers as a solution for this market as a direct result of this very aggressive tactic. But it will certainly be difficult to convert free users into paid customers at some later date.

It would be useful to learn more about how Gartner reached a decision to include BlackBerry in this lower left square of the Magic Quadrant, directly opposed to the “Leaders” square, at the top right.

Disclaimer: I recently closed a long position in BlackBerry. I am not affiliated with Gartner, Inc.

Ira Michael Blonder

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

5
May

Is Blackberry’s Freemium Strategy the Right Approach to Gain Share in the EMM Market?

Last week Gartner hosted a short, free-of-charge webcast on BYOD. The webcast was led by David A. Willis, a Senior Research Analyst at Gartner. The material presented in the webcast was collected from the responses of a sample of enterprise businesses to a series of questions about BYOD. A substantial majority of respondents (more than 85%) indicated a decision to invest in an Enterprise Mobile Management (EMM) solution.

As Mr. Willis noted, enterprise consumers of EMM solutions have a lot of choices. A number of ISVs (including IBM) compete in the market. In fact, Mr. Willis announced Gartner’s plan to publish a Magic Quadrant on this market sometime during the second quarter of 2014, which, one may argue, indicates the promise of the market as well as the intensity of competition for a share within it. Presumably, Blackberry® Enterprise Service 10 (BES10) is a contender in this market.

But does Blackberry’s EZ Pass campaign, which offers enterprise customers a “free pass to secure multi-platform Enterprise Mobility Management” make sense, especially for a company with an announced intention to transition from a revenue model built on hardware sales, to one built around enterprise software? In contrast, the online promotional content on IBM’s MobileFirst Managed Mobility Service neither includes any pricing information, nor a free offer, nor, finally, anything similar to these promotional tactics. The page, on the other hand, is used to present viewers with more traditional choices: white paper downloads, free research on the topics (BYOD and EMM), etc.

Blackberry’s “freemium” approach, in my opinion, would be the right tactic to use if EMM market prospects either have little familiarity with BYOD (and the related management requirements to successfully implement it for an enterprise business), or if EMM market prospects are displaying a lack of interest in Blackberry’s own offer. Based on Gartner’s results, it is safe to say a large section of likely consumers of a solution like BES10 are familiar with the drivers underpinning the EMM market.

So I am left to conclude Blackberry is facing a lot of resistance to BES10 and, therefore, is heavily promoting the BES10 giveaway. I do not consider this strategy a positive indicator of success for Mr. John C. Chen’s plan to transition from hardware sales to enterprise software sales. I expect the intensity of the “freemium” campaign will increase as Gartner gets closer to publishing the Magic Quadrant I mentioned above.

Disclaimer: I’m long Blackberry, with no present position in IBM and no affiliation to Gartner

Ira Michael Blonder

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

2
May

Enterprise Business Displays a Strong Appetite for Enterprise Mobile Management Applications

During a webcast titled The Impact of BYOD, which was led by David A. Willis, VP Distinguished Analyst of Gartner®, Gartner published data reflecting the results of a statistically representative survey of enterprise businesses. Eighty seven (87) percent of respondents indicated their intention to invest in a Mobile Device Management (MDM) solution.

Certainly 87% is an important statistic. Mr. Willis identified several drivers for this collective appetite. The center of these being security issues (76% of respondents indicated “Security Issues” as a major impediment to MDM adoption). It is worth pointing to a second major obstacle, “Additional Support Complexity”, which attracted almost a matching number of respondents (73%). As Mr. Willis noted, complexity is an almost unavoidable result of implementing a BYOD policy for an enterprise. With security and complexity as powerful drivers, if Gartner’s data can be assumed to be accurate, a clear majority of enterprise business CIOs are evidently spending some sleepless nights grappling with how best to manage BYOD.

The market, as Mr. Willis also noted, is very contentious. There is no lack of solutions. But, despite the large number of players in the space, there is certainly room for ISVs to profit from the business. Truly useful MDM and EMM solutions are not mere commodities — at least not yet.

Mr. Willis announced Gartner’s plan to publish a Magic Quadrant on the MDM and Enterprise Mobile Management (EMM) sometime during Q2 2014. The ISVs fortunate enough to have a spot in the Quadrant, and, better yet, those in the familiar upper left “Leaders” square, stand to benefit. Mr. Willis mentioned IBM as a contender in this market. I, myself, would add Blackberry to the list.

But will Blackberry Enterprise Server (BES) be included in the Quadrant? Or does Blackberry have another application, one better suited to meet the functional requirements of a true EMM solution (Mr. Willis explained why EMM solutions look more likely to magnetize the interest of enterprise consumers than their MDM counterparts) for Gartner’s review? Unfortunately, there is scant information on this topic.

In my opinion John C. Chen’s plan to transform Blackberry into an ISV providing MDM/EMM solutions, if it is to produce any positive results in the near future, would certainly receive a major boost should Gartner include a Blackberry solution in the Quadrant.

Disclaimer: I’m long Blackberry. I do not have a present position with IBM. I have no affiliation with Gartner®.

Ira Michael Blonder

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

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

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

27
Feb

A Good Week for Blackberry in the Media

Blackberry’s QNX OS scored a big win at Ford this week. If readers have yet to catch up with this news, they can read about it in an article written by Craig Trudell and Jeff Green, which was published on the Bloomberg web site on Monday, February 24, 2014: BlackBerry Gains as Ford Said to Pick QNX Over Microsoft. At the same time, the volume of articles written about facebook’s controversial $19Bil acquisition of WhatsApp, engulfed Blackberry’s Messenger (BBM) service. All this news amounts to a positive sign CEO John Chen is succeeding in his attempt to resuscitate this mature ISV.

What’s different about Blackberry’s BBM service, as compared to WhatsASpp, is not at all the feature set, but the installed base of users. BBM users are predominantly people employed by large organizations in the public, private, and not-for-profit sectors. So the monetary value represented by the BBM user community may actually be greater than the same value metric for WhatsApp users, despite the annual subscription opportunity and the enormous numbers of WhatsApp users. Bottom line: teenagers lack the buying power of enterprise business users.

As far as the win at Ford for the QNX OS, put this one on top of the role the QNX OS played for Audi’s Infotainment system and I get the feel of momentum building for further sales of this feature-rich smart car OS. QNX has been at the smart car business for quite a while and presents the market with a particularly rich set of features.

Speaking of Audi’s Infotainment system, another company of recent strong interest to me, NVIDIA, is also playing a part in the architecture of Audi’s Smart Car feature set. In a press release dated January 7, 2013, and titled Audi and NVIDIA Expand Visual Computing in the Car, NVIDIA announces a big win at Audi. Curiously, the win for NVIDIA promises to displace the QNX driven Infotainment system.

Disclaimer: I’m long NVIDIA and Blackberry

Ira Michael Blonder

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

22
Jan

Is Blackberry Firing Up the Enterprise Software Market for Mobile Device Management?

Citron Research thinks Blackberry will capture the dominant position in the enterprise market for Mobile Device Management (MDM) solutions. Enterprise business and comparably sized organizations in the public, and not-for-profit sectors need MDM solutions to successfully, manage secure remote data communications between smart phones and tablets and internal networks and data sources.

In a research report titled BlackBerry: Why the Shorts and Analysts Have it Wrong
Citron looks at a $15 Target – Minimum
Citron Research argues BlackBerry has been misunderstood by investment analysts and the financial news media. They also like the appointment of John Chen as the new CEO, and his stated intention to transform the company.

There can be little doubt of the depth of consumer interest in an effective MDM solution. Demand for tablet computers is strong. More low cost windows tablet computers are coming to market. At the same time, in April, 2014 Microsoft® will stop supporting the Windows XP® operating system. Some portion of today’s market for windows tablets can likely be attributed to enterprise customers replacing laptop Windows XP PCs. This portion looks to grow even further post April. So Enterprise IT organizations have a burning need for an effective MDM solution.

With regards to smartphones, the lower end of the market is broadening, while the capabilities of leading products in the category is increasing. Once again, Enterprise IT will look to leading MDM solutions to help them protect the internal users looking to communicate with internal networks with consumer grade android, windows, and iOS smart phones.

Citron’s presentation is certainly compelling, but conspicuously absent from the list of BlackBerry’s competitors for this business is IBM. One can convincingly argue IBM is more embedded into enterprise software markets than BlackBerry, and possesses the quality sales force required to service customers. On December 18, 2013, just 2 days prior to BlackBerry’s quarterly report, and Mr. Chen’s conference call, which Citron thinks “[a]ny serious investor in BlackBerry should read . . . ” (quoted from Citron Research’s report on BlackBerry. I’ve provided a link to the full report earlier in this blog post), IBM announced its acquisition of Fiberlink Communications and its MaaS360 MDM application.

A careful study of the landscape of the enterprise software market for MDM solutions should certainly include mention of offers from more appropriate competitors to BlackBerry under Mr. Chen — namely IBM, Microsoft, Oracle, SAP, Verizon and AT&T. Each of these businesses possesses the enterprise software sales teams and experience to make Blackberry’s transformation a bit harder to accomplish.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved