At BlackBerry, a battle between device sales and enterprise services

BlackBerry Q10
Credit: Ari Moore via Flickr

It's a risky strategy, but even if it fails, BlackBerry will likely survive.

On Tuesday, BlackBerry announced that it was opening the management APIs for its BlackBerry 10 platform to a select group of third-party enterprise mobility management (EMM) vendors -- Airwatch (now owned by VMWare), Citrix, and IBM. In an interview posted to the company's Business Blog about the decision, John Sims, BlackBerry's President of Global Enterprise Services, seemed to imply that BlackBerry is open to allowing other enterprise mobility management (EMM) vendors access to the APIs in the future.

The move represents a significant shift in the company's enterprise strategy and priorities.

BlackBerry staked its claim to fame on its tightly integrated end-to-end platform. It developed the OS, made all the devices, provided a BlackBerry-specific management and security server, and integrated secure communication through its own network operations center (NOC). That chain linking and securing all parts of BlackBerry usage allowed the company to become the gold standard of mobile security.

Unfortunately, the company failed to see and address the sea change in enterprise mobility created by the iPhone, Android, rapid adoption of smartphones in the consumer market, and the emergence of BYOD and other consumerization trends. Apple's decision to build enterprise capabilities like encryption and MDM into iOS 4 (and significantly expand on those capabilities in last year's iOS 7) and the emergence of third-party EMM vendors made iOS and Android "good enough" in terms of security and manageability.

Given that users also prefer these devices, that's spelled bad news for BlackBerry.

A large number of companies have concluded that employee satisfaction and productivity and customer perception are more important that BlackBerry's top-notch security. As I reported back in March, a recent survey from the Ponemon institute (commissioned by EMM vendor MobileIron) showed that even among the conservative and security-conscious financial services industry, there was a significant move away from BlackBerry devices.

Services versus handsets

So now BlackBerry seems to be betting that it can sell more BlackBerry 10 handsets to enterprises if it doesn't require companies to use BES 10, the EMM solution for BlackBerry 10 and classic BlackBerry devices that also supports some iOS and Android management capabilities.

Certainly, this will lower the cost of adopting BlackBerry devices. The cost of BES 10 not only includes the cost of the server hardware, but also the time and manpower to set up and manage the servers. If customers are already using an EMM solution from BlackBerry's partners to manage other devices, rolling out BES 10 just to manage BlackBerry devices is a hard sell.

But this is still a risky proposition. BlackBerry 10 devices aren't selling well in the consumer market, and that market is largely dictating what devices are brought into the workplace, regardless of the management or ownership model.

So BlackBerry's move could easily backfire: Removing this restriction may not do much to revive device sales, while also giving organizations one less reason to investigate BES 10 and its expected successor, BES 12.

This illustrates the big and perhaps irresolvable challenge BlackBerry faces. It originally built its reputation on the interlinking of devices and services, but now most organizations aren't investing in such a tightly integrated system. That has put the company in the awkward position of needing to prioritize the individual pieces of that system and promote the ones that deliver the best potential return on investment.

Ironically, BlackBerry's strategy in the EMM world seems to be the complete opposite of Microsoft's. As I noted earlier this week (as well as last month when Microsoft launched its Enterprise Management Suite), while the company would prefer to see Windows Phone do well in the enterprise, it is happy to offer tools and apps for iOS and Android devices to build a broader ecosystem -- as long as Microsoft products are running some of the back-end services.

BlackBerry, on the other hand, appears to be focused on getting BlackBerry 10 devices into people's hands by breaking the devices out of the company's ecosystem.

Some organizations still need the gold standard

Despite this risky strategy, I don't believe BlackBerry is doomed.

There are still many organizations, including governments and government contractors, that do require the level of immense security that BlackBerry offers. The revelations of NSA data collection by Edward Snowden released over the past year has made governments and prive sector organizations reevaluate their mobile security needs, which could translate to a stable or even growing business for BlackBerry devices paired with BES 10 or 12 and BlackBerry's related secure services.

But it's possible that BlackBerry will end up being a marginal player in enterprise mobility, serving only those types of customers while the broader market goes to other vendors like Apple and Microsoft.

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