How Enterprise Lust is Killing RIM

By Rob Enderle July 06, 2011

It is hard to imagine how RIM could have fallen so far so fast, at the current rate they will be out of business in about a year and a half.    A decade ago they were the company to beat in the Smartphone space nearly knocking out all competitors including the high flying Palm Treo to own this market.   But like most companies who deliver an end user product they forgot who their customer was and Apple rolled right over them.   Microsoft made the same mistake and Google appears to be next on the list.   That mistake is thinking that the IT buyer is your customer and losing focus on the real decision maker the end user. 

Let’s explore that.

RIM’s Rise to Power

I was one of the first users of a RIM two way pager.   The product, for its time, was amazing and allowed me to keep up with email even when I was traveling.   Hard to believe no, but at that time the only way to see email was on a connected PC and Wi-Fi wasn’t that common.   The Blackberry was nicknamed the Crackberry during RIM’s rise to power because those of us who had one couldn’t live without it.   What took RIM to these glorious heights were users who became fans and then advocates. 

RIM moved into companies like no other product of its time.   Top executives brought them in and they were seen as symbols of having arrived.   In short they represented status in their companies and that coupled with the fact they were actually very useful drove them into companies in large numbers but it wasn’t IT driving the movement it was IT fulfilling a demand that was user driven and RIM forgot that and Apple stepped into the breach. 

RIM’s Fall

At the core of the problem was the fact that RIM forgot what drove them into the company in the first place and that was a combination of status and usefulness with the executive at the core of the effort.   Apple sells to the Lexus buyer, recent survey results show their customers are less concerned about price and more about service, this speaks solidly to their focus on status and the very people who drove RIM into the business market started driving iPhones into the same space. RIM was increasingly focused on IT buyers under the mistaken belief that IT buyers drove technology into companies. They don’t, they distribute technology but his choice for anything other than technology infrastructure is with the line managers.   And, for personal technology, like Smartphones and increasingly PCs those choices are increasingly driven by what the employee wants. 

Clearly there are still some unique markets which require higher security like trading floor, government and healthcare which had issues with Apple security but slowly those issues are being resolved and as they are folks in those markets are increasingly shifting away from RIM. 

Repeating Microsoft Leading Google

Microsoft is holding on with Windows but they drove into the market by being the alternative to an IT solution, they lost their way and bled share by being wedded too closely to IT and Apple and Google have been pounding them hard of late.    Microsoft, by shifting back to marketing to users and user features in Windows 7 reversed this trend a bit showcasing it can be done. Google already seems to be shifting to an IT focus and while they aren’t focusing their tablet or phone efforts on IT yet, those efforts are still not meeting expectations and even Android smartphone growth is slowing while Apple’s appears to be accelerating.    The lesson here is that for user focused products vendors must focus in turn on the users and personal status is a major part of any successful user line.   Forget that and you’ll be the next Palm or RIM.  

Wrapping Up: It’s the End User Stupid!

It is funny how often I go back to successful companies like Microsoft, Netscape, Palm and RIM and found that the more they focused on the enterprise buyer the farther they fell from their initial highs. Microsoft is the only one of these firms that actually made the transition and they are still valued about 25 percent lower than they were a decade ago.    Apple never gave a care about the enterprise and focused like a laser not just on the consumer but on the consumer with money to spend. However, I’ll bet after Steve Jobs leaves, some brilliant mind there will repeat this same mistake.   Certainly that is the path that Apple was on before Steve came back and killed all of the enterprise efforts.   

Keeping IT happy will help with deployments but if you focus on IT exclusively or even mostly you run the risk of losing the very people that made you successful.   RIM could turn this around but they’d better refocus quickly because they are clearly running out of time.  

Rob Enderle is President and Principal Analyst for the Enderle Group. To read more of his articles on TechZone360, please visit his columnist page.

Edited by Jennifer Russell

President and Principal Analyst, Enderle Group

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