The appointment of enterprise software veteran John Chen, former chief executive officer of Sybase, as chairman and interim chief executive officer of BlackBerry suggests that Fairfax and others see the company’s future in software rather than devices.
This makes sense in light of BlackBerry’s sputtering device shipments over the past few months, but it’s still not clear where that growth will come from.
BlackBerry’s new investors seem to see its future in software, which means using BlackBerry servers as the core of a broader enterprise device management platform, but this generates very little revenue for the company today.
Though it’s achieved some traction with enterprises upgrading their BlackBerry servers, it has failed to sell many BlackBerry 10 devices, and this looks unlikely to change. This ultimately harms the unique selling point of BlackBerry server products leaving the door open to replacement by rivals that are better able to support the more popular Apple and Android devices.
At the same time, it’s also too much to expect BlackBerry’s other software investments to ramp up fast enough to secure its long-term survival and return to growth. QNX, whose main value was providing an OS for its devices, currently generates less than $100 million a year. Equally, BlackBerry Messenger has had a good couple of weeks of downloads as a cross-platform messaging option, but continues to trail other similar messaging apps significantly.
Fairfax’s investment will buy the company some time, which it badly needs, but the company needs a new strategy more than ever. If Fairfax had taken the company private, it could have kept that strategy to itself. But with BlackBerry remaining a public company, Chen and Fairfax chairman and chief executive officer, Prem Watsa, need to start communicating that new strategy very soon to inspire confidence in a turnaround.