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BlackBerry makes slow shift to becoming a services company, again

BlackBerry seems to be regaining its base in the enterprise server space fuelled by its new BES 10 offering.

Mr “So while we will continue to have a devices range, we will also provide the software solutions to secure those devices,” BlackBerry India MD Lalvani explained.

Blackberry might be down, but it is definitely not out. While it has not been such a great year for the Canadian smartphone makers, the company seems to be regaining its base in the enterprise server space fuelled by its new BES 10 offering that helps secure even Android and iOS devices. While BlackBerry is already buoyed by the sales of the BlackBerry Z10, even though after a price cut, the company hopes its new five-year agreement with Foxconn Technology Group, outsourcing the production of its smartphones, will help create economies of scale not possible while producing the phones in North America.

“There are three things that will drive the growth for BlackBerry in the coming year. One will be the shift of ownership of production to Foxconn, as we focus on the operating system, R&D and innovation. Plus, we have added 30,000 BES10 servers in the past year since its launch and we have BES 12 on the anvil. And since we opened up BBM there are now 85 million users globally and we are also banking high on monetising BBM channels for brands of which we already have around 2,50,000,” BlackBerry India MD Sunil Lalvani explained during a recent interaction. “These are the four pillars on which the company will grow in the coming months.”

In fact, the impact is already showing. While two years ago 60 per cent of BlackBerry’s revenue came from hardware and the rest from software, 2013 Q4 results show this has shifted to 63 per cent software and services and the rest hardware. It seems the company wants to maintain this fundamental shift, even while trying its best to grow the hardware side.

BlackBerry now wants to be seen across devices and operating systems, cashing in on the bring your own device trend across the world. According to Gartner, the spend on enterprise software will total $320 billion in 2014, a 6.9 percent increase from 2013. This is the market that BlackBerry wants to tap into. “Mobile Device Management will be one of the growth sector as the endpoints in mobile are growing like never before. So while we will continue to have a devices range, we will also provide the software solutions to secure those devices,” Lalvani explained.

The recent incidents of snooping on heads of states has also given a boost to BlackBerry’s stock with security agencies around the world scurrying to secure their communications. In fact, the company was successful in getting German Chancellor Angela Merkel to shift to a BlackBerry following reports that US may have snooped on her. While BlackBerry used its expertise to encrypt the phones and its data, it called on German company Secusmart to embed an SD card with an encryption engine that converts voice calls to data packets that cannot be hacked into by external agencies.

Though details are sketchy BlackBerry is also working on an enterprise BBM suite. It has already announced that the first solution in the eBBM Suite will be BBM Protected that offers regulated industries the “most secure and reliable real-time mobile messaging”.

It will however be a steep climb for the company until it figures out what to do with its devices. While the Foxconn pact will ensure that the company will be able to bring out cheaper devices, it might not be able to get to the sub-$100 point where it will be able to counter Android. That is why the company wants to stick to its biggest strength, the QWERTY keyboard.
With the shift back to enterprise solutions and QWERTY phones, the company now seems to have come full circle.

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