I was reading about the rumor that BlackBerry might soon support Android apps and I looked at my company provided Curve and started musing – what would I do if I were in RIM‘s shoes? The obvious problem is that Blackberry has lost its cool. It is now the phone of the stodgy midlife crisis set. No amount of ads with twenty-somethings talking admiringly about messaging on a beach will make these devices hip or even remotely interesting. And yes I used the word hip – proving I am old and unsophisticated.
So if you are RIM what do you do? You acquire enterprise applications to deliver on your platform that your customer base needs while you still have them. But who to buy? Why not OpenText?
A few observations brought me to this idea,
- First – An existing brand will never out cool Apple. Somebody might one day do it but it will not be any company that goes by an acronym.
- Second – The generation in the corporate funding driver’s seat is still motivated by risk aversion and BlackBerry still “feels” safer in the board room than either iOS or Android.
- Third – The convergence of communications and computing is accelerating and its only a matter of time before cloud services become such a large part of the business that traditional enterprise application and computing vendors either acquire or are acquired by those in communications.
The single biggest problem in the mobile world is its lack of stickiness. Anything that a provider of either device or service can do to improve affinity is valuable so if I can start to bring along my own familiar enterprise application capability beyond simple messaging to my mobility crazed customer base I am better positioned to influence them to stay with me – or at least create a supplemental revenue stream.
So why OpenText? I have been the happy contrarian when it comes to OT acquisition rumors. They are a perpetual favorite to speculate on because of their position in the market and the fact that they are not owned by a larger more diversified concern. As I have stated though – most of the “easy” suitors in the business application space (ORCL, SAP, MSFT ) are either distracted by other concerns or not interested in spending $1bln+ on an overlapped portfolio of offerings that duplicate capabilities they already have access to. So then if there is to be a buyer – they must have a need to get into the market, not already have this capability and be big enough to absorb the spend.
Another idea that make the pairing interesting is that they are neighbors – literally. They could meet at the Starbucks on King St. in Waterloo to negotiate the deal. Believe it or not that matters. Merging cultures in large acquisitions is hard but adding a regional bond to the mix gives the idea a boost.
On the other side of the argument is the very rational position that delivering not creating enterprise applications is what RIM does – ECM is not their core. They have a decision to make though. Whether RIM likes it or not they cannot be the same company a year from now if they are to survive. They need to rethink what their strength and value in the market really is. They are not fun. They are functional. They should embrace that and evolve the confidence corporate users have in them into a dependence by providing the full stack of applications that people will continue to need to do their jobs.
Lastly to me the mobile business world boils down to three C’s’. Connectivity , Content, and Collaboration. OT brings along an understanding of the value of business content and that combined with confidently secure mobility means putting these two together might not be as weird an idea as I first thought.
Hi, I liked your post a lot.
I was expecting SAP to bid for OpenText. Last year I heard “rumors” about possible deal between EMC and SAP, which was supposingly interested in former CMA division. The rumor did not come true but ever since I have observed tighter cooperation between OpenText and SAP.
I have doubts if it makes sense at all to buy such big player as OpenText. Let’s take acquisitions of EMC over the past years as an example. Almost each year in the past 4-5 years EMC announced new question in the IIG division (Documentum, Captiva, x-hive, DocScience – xPression). From the financial perspective I would not call these deals successful for EMC. Financial data after acquisition were consolidated but the IIG results did not grow as much as one would expect. I guess it was the case with other acquisitions of ECM vendor.
Plus why would one buy mature technology with all the skeletons in the closet ? It is easier and cheaper to purchase shares at 10 to 20 startups and cooperate with them to deliver value and “sexy” apps for BlackBerry users .
Thanks for the comment. The SAP/CMA rumor recycles every couple of months- as a rule I don’t comment on EMC acquisitions(or divestitures) but I will say that one has all the earmarks of urban legend.
Large acquistions often make the most sense because at this scale – you have to so something big just to move the needle a little. RIM w/ a market cap ~ 35Bln making an investment of a couple hundred million might not register as significant to the street. Agreed from an R&D and future market point of view your idea makes sense. As management though I would almost want to see them aquire an enterprise app shop first to have the product infrastructure to do accelerate go to market with the ideas the smaller leading edge acquisitions produce. RIM also lacks the professional services practice critical to making these things work. Another benefit of buying up a large app vendor.
I though I should let you know that BlackBerries are currently very hip with teenagers in Holland (and most other countries in Europe i understand).
They are liked for Ping, the instant messaging app. Pinging has even become a verb in the Dutch teen slang. BB Bold 9700 was the best sold smartphone in Holland last year, before Apple, Nokia and Android phones.
So BlackBerry has another chalange: how to respond to market circumstances that are so different in the Us and Europe. If the make big changes, they risk losing their current customers.
We’ll see what they come up with. I hope they will not follow in Palm’s footsteps.
point well taken re:regional differences in perception. wonder how much of it is really cool vs “its not Apple” – I have no idea
A guy from motorola said something to me when I was trying to decide on buying my DroidX. I had a VERY bad experience with the Que. He pointed out that most often its not the hardware that is make or break for an mobile device – its the OS.
I am not sure I totally agree but what it boils down to is that so long as the hardware doesnt get in the way – the apps make the experience. BB’s problem tomorrow if not today is worse than customer flight – its developer flight. Cool app innovations and the best people are in large part graviting away from Blackberry as a platform. Without a healthy developer ecosystem a mobile platform will not survive long term.
So your fears for BB going the way of Palm are justified. Look at job reqs and compare open positions for BB devs vs ANY other platform. That trend is as good a predictor as any for where the platform will be 12 months from now.
I just ordered an Android device. It was hard to consider saying goodbye to my chiclet keyboard, but then I experienced Swype on the Android. Swype redefines the experience of text input in a very cool (and yes, hip) way. I really couldn’t see too many reasons for sticking with BB once my typing concerns went away.
Swype is not available for the iPhone, BTW.