BlackBerry Australia, local resellers hit back at Gartner

Research body Gartner has given BlackBerry users a six-month window to consider dumping the once-great smartphone maker – and local resellers aren't impressed.

Last month, Gartner urged clients to "decide on a new course of action" in a member-only report.

As a minimum solution, the report called for organisations to devise a mobile device backup plan within the next three to six months in order to avoid disaster.

Ken Dulaney, Gartner analyst and author of the report told CRN US, "at last report, [BlackBerry] had about $2.5 billion in cash, but [the latest] report says they are burning through it pretty quickly".

Many onlookers expect BlackBerry to be acquired; Dulaney cited BlackBerry's strong enterprise customer base as a point of interest for a company looking to acquire a portion of BlackBerry. He added such an acquisition would sustain BlackBerry environments long enough for clients to migrate to other solutions.

Earlier this year, BlackBerry revealed its Enterprise Service 10 tool, which offers device management, security and app management for BlackBerry, iOS and Android devices.

However, Dulaney said it would be more beneficial to "put a separate mobile device management system in for Apple, Android and Windows" mobile devices.

[LinkedIn: Can BlackBerry turn around the decline?]

BlackBerry Australia managing director Matthew Ball told CRN that Gartner's advice was "purely speculative".

"We recognise and respect external parties' opinions on BlackBerry's recent news. However, many of the conclusions by Gartner about the potential impact of a sale or other strategic alternatives are purely speculative.

"BlackBerry is restructuring and pursuing strategic alternatives to increase its focus on its core enterprise business," said Ball.

"We remain steadfast in our mission to deliver the most secure and powerful mobile management solutions and smartphones to our customers."

Ball added: "We are just as excited about our momentum here in Australia. More than 65% of our handheld base in the ANZ region has either upgraded or is migrating to BlackBerry Enterprise Service 10, which includes a mixture of blue-chip, government and private customers."

Open letter

Ball's comments came as BlackBerry sent out an open letter published in 30 newspapers across nine countries in which it stressed that its customers can continue to count on BlackBerry and its products, despite the challenges it is facing and the changes it is undergoing.

BlackBerry's products have struggled to compete in a competitive mobile market, prompting the company last month to announce that it would slash its global workforce by more than a third.

The company's chief marketing officer, Frank Boulben, wrote: "Our customers read a lot about BlackBerry these days, as we make the headlines quite often – this has created a lot of noise and confusion.

"We want customers to know that they can continue to count on us – we are here to stay. We have substantial cash on our balance sheet and we have no debt. We are restructuring our cost base and this is a very painful transition, but it will make us financially stronger and we want to get that message directly to our customers."

Aussie partners speak out

CRN spoke to several local BlackBerry partners to get their views on the smartphone makers' woes and the recent Gartner report.

Tim Fussell, founder of Sydney-based imei, told CRN: "I think the advice from Gartner is likely to be very damaging to BlackBerry.

"My interpretation of what Gartner is saying is that all BlackBerry customers must drop the BlackBerry technology as BlackBerry will be out of business within six months.

"This seems to be pretty excessive as there is still a significant base of BlackBerry users that won’t disappear overnight."

Fussell pointed out that "Gartner’s own numbers show that Blackberry still holds 24 percent market share".

He conceded that this was "nowhere near where it used to be [but] it is still a pretty impressive position".

"Gartner’s predictions of 9 percent market share by 2016 are pretty bold in a market like this where technology is evolving at such a rapid rate.

"I personally think the Z10 and Z30 are among the most impressive devices available in the market," added Fussell.

Another major Australian BlackBerry reseller, Si Partners chief executive Brian Harris, was stern in his response to Gartner.

"It is very sad that companies like Gartner have opinions about other companies that are so far from the truth it is almost laughable.

"BlackBerry has a huge fan base in the enterprise industry and it will survive even if Gartner and other industry analysts try ignore the reality. CIOs, IT managers, IT administrators and system analysts know deep down that they are having the wool pulled over their eyes by the likes of Gartner," he said.

Justin Roche from MSC Mobility called the Gartner report "a bold move"

"It is the first time I have seen Gartner come out and say move away from a technology. BlackBerry virtually invented the smartphone space, they were the catalyst for moving away from feature phones and SMS and integration into the corporate environment."

However, he agreed BlackBerry had missed the boat as mobile buying patterns changed.

"Consumerisation came about because people decided to take back control of technology inside an organisation and that drove the uptake of iOS devices, and by extension, Android devices."

Roche said BlackBerry was focused on pitching its security credentials at a time when security was losing its importance.

He said while security was still an issue, the fact most organisations kept news of breaches under wraps made mobile security a hard sell.

"A CIO or CTO doesn't want to come about and say, 'we were hacked'. Without those stories, it is hard to get traction in the market with a security product."

MSC Mobility has more than 40,000 devices under management. Roche said: "The large majority are iOS and we are seeing a large attrition where BlackBerry is being displaced.

"You can take the approach of putting your head in the sand and hope the magic mobile fairy will come along but in my experience that is a very dangerous approach to take. My feeling is Gartner had to take a call based on the attrition and they have done that based on the numbers."

Meanwhile, ITtelligent Consulting Services director Rob Adelman told CRN he wasn't sure whether Gartner's warnings were accurate.

"I have been viewing Gartner for 16 years and a lot of what they have said is not what has eventuated. Maybe one day they will be right."

However, Adelman conceded, "I think there is just no market for BlackBerry in Australia that I can see".

ITtelligent was licensed to install BlackBerry servers, which once a "good margin" business but now offered less benefit, said Adelman.

He said BlackBerry Server played a role in the smartphone maker's decline.

"BlackBerry used to charge an arm and a leg for a licence. When the iPhone came out, RIM said they would give away the software for free, but it was still an extra step that customers had to do and it was that extra step that stopped a lot of users going to BlackBerry."

Doing business with BlackBerry

Some partners said there were still business opportunities for BlackBerry.

imei's Tim Fussell said: "Our activity around BlackBerry is solid. Following the launch of BlackBerry 10, we have seen an increase in opportunities to upgrade infrastructure across client sites.

"BES 10 has continued to evolve and a lot of the issues that were present at launch have been ironed out. As a result several clients are seriously evaluating making the move."

Fussell said BES 10 represented a competitive MDM tool for managing other platforms.

"A key component of this is the very effective container-based management solution for BYOD.

"The reasons why organisations purchased BlackBerry in the first place – namely security, data compression and ease of management – have not gone away, which is why we see the BlackBerry solution will continue to remain relevant in the enterprise," added Fussell.

Si Partners' Brian Harris said: "Si Partners has just had its best two quarters in a row thanks to BlackBerry and Secure Work Space. So who is actually failing here?"

He said BlackBerry's $2.5 billion in the bank was also a sign of strength.

"The Enterprise Mobility Management solution BlackBerry now has for its customers is not only one of the best for security functionality, but has the support behind it."

Harris added: "I agree the BlackBerry devices released have not done well. However this is not because the devices are bad; it’s because consumers are focused on what they want and not what their employers or businesses want or need to secure the environment."