Interim CEO John Chen May Prove to Be a True BlackBerry Game Changer

By Tony Rizzo November 05, 2013

When those of us who are concerned with these things woke up on Monday morning it was with the expectation that BlackBerry would either sign on the dotted line for the $4.7 billion acquisition announced a month ago, announce a deal with a third party, or possibly extend the time frame for figuring out which of these it would choose to pursue. In the meantime there have been lots of rumors of possible interest from third parties that ranged from a possibly legitimate interest from Lenovo to BlackBerry begging Facebook to buy it.

So this morning we were ready to hear about which of these it would be, but BlackBerry surprised us in several ways. First, the company announced that all previous M&A bets were off and that the company would remain an independent and publically traded entity. Well, ok. Second it was announced that the company would receive a $1 billion infusion of cash from Fairfax Financial and other parties to keep it going as an independent entity. Well, ok. So far it sounded like we would simply continue to see more of the same old BlackBerry doing the same things it has done for the last 18 months or so.

Ah, but now came the surprise. CEO Thorsten Heins, who we've constantly said has done well with the truly ugly hand he was given to play is stepping down effective immediately (or being ousted - one or the other, but it doesn't matter, the bottom line is that he's out). Now comes the kicker: John Chen is stepping in as the Executive Chair of BlackBerry's Board of Directors. And he will be stepping up to an interim role as CEO while BlackBerry sorts out its knitting and prepares to begin hunting for a new CEO.

Well now, things are suddenly becoming interesting again! We've covered the details of the new investment and personnel changes elsewhere - here we'll concern ourselves specifically with John Chen and what he could mean for BlackBerry's future.

John Chen - A Mobile Kind of Guy

Chen, formerly the CEO and Chairman of Sybase, and later on a member of SAP after it acquired Sybase, was the guy who presided over Sybase's acquisition of iAnywhere - which hails from the exact same Canadian neck of the woods that BlackBerry hails from. These are companies that therefore know each other well and have long played in the same ballparks, sometimes with each other, sometimes on opposite ends.

We've covered Sybase dating back to early 1990s, and we've covered the company closely since its first forays into large scale enterprise mobility dating back to 2003. After acquiring iAnywhere the company subsequently acquired Xcellenet, from which Sybase's Afaria emerged. There are other mobile acquisitions Chen presided over at Sybase, but there is no need to repeat them all. The more important bottom line is that Chen drove Sybase to become a mobile-first company while retaining its core root database businesses and launching Sybase's "Unwired Enterprise" campaign.

Chen evolved into a serious mobile executive who transcended database roots to evolve Sybase into a different 21st century enterprise player that was able to capture a non-trivial share of mobile enterprise business. And it did so at the very same time that BlackBerry - then still Research in Motion - was abdicating its enterprise throne to make a major land grab for consumer markets. Unfortunately for BlackBerry, it opted to make its land grab at the same point in time Apple decided to launch the iPhone.

The rest is history that needs no repeating, but the challenges that Chen now faces, and the skills that Chen now brings to the game, are all entirely rooted in those days. Chen clearly has a handle on a very wide range of business technologies. For him it isn't only about mobility but about delivering a cohesive, enterprise-wide mobile strategy that connects with every other IT endeavor.

Can Chen, in his new role as Executive Chair of BlackBerry's Board of Directors and as the company's interim CEO, reposition BlackBerry to deliver on such a thing? The odds are greatly against it - BlackBerry has fallen so far that recovery may not be possible. It is worth noting what Chen said immediately following the announcement of his appointment:

"I am pleased to join a company with as much potential as BlackBerry. BlackBerry is an iconic brand with enormous potential - but it's going to take time, discipline and tough decisions to reclaim our success. I look forward to leading BlackBerry in its turnaround and business model transformation for the benefit of all of its constituencies, including its customers, shareholders and employees."

The first thing that comes to mind when considering how best Chen can deliver on his goals is whether or not BlackBerry should remain a public entity. We ourselves seriously believe the company should in fact be taken private and removed from the glare of public scrutiny. Yes, it is the same strategy Michael Dell preached for Dell. It makes far more sense for BlackBerry to do so.

Tough, Long Term and Disciplined

BlackBerry needs a significant respite from all the public noise and would have much more freedom to conduct its business in ways that are going to be tough, long term and disciplined. These traits are directly at odds with having to worry about delivering quarterly earnings.

Next, the company will need to initiate a search for a new permanent Chief Executive Officer, which Chen will lead. Will he be able to find someone who can take directions from Chen for the foreseeable future before truly becoming the company's CEO in more than just title? We can also expect to see BlackBerry's entire senior management team revamped. The process will likely take some time to complete, and will take even longer for a new team to truly come together.

If Chen is willing to invest deeply in guiding both the process and the management team - including the new CEO - it will be worth the effort and time. If Chen ends up simply as a hands-off gatekeeper we'd be very concerned about pulling it off.

On the CEO front we wonder if former head of iAnywhere Terry Stepian - who hails from the same Canadian area as BlackBerry (remember that is where iAnywhere was based) would be interested in the role. Stepian, who is also a former Sybase president and someone who was a key player in the Unwired Enterprise efforts at Sybase, has long been one of our favorite mobile executives and someone we ourselves have a great deal of respect for. We'd love to see him take over as BlackBerry's CEO. Stepian would be able to keep Chen fully engaged and would bring the same immediate level of understanding to the key problems at hand.

Move on from Devices

BlackBerry needs to accept that it is no longer a device maker - or rather that it cannot continue to be one. We still believe to this day that BlackBerry should simply become a subsidiary of Samsung and focus entirely on delivering BlackBerry 10 to the enterprise on Samsung devices. That said there is also LG to consider as a device partner. Perhaps a switch or an addition for LG from Google to BlackBerry.

In any case, there are still 65+ million BlackBerry users out there - with somewhere around 20 million of them being true enterprise users (rather than pure consumer users). That is still a huge combined market of potential device sales. Chen needs to find the right way to monetize this user base asset in ways that do not require it to build its own devices. BlackBerry lost out on the device market the day it failed to take the iPhone seriously. It is long past time to move on from there.

That leaves BlackBerry with both enterprise and consumer services that it can still deliver on. And these are the key areas to monetize. Enterprise services will be the premium technologies for BlackBerry to monetize and rebuild its business. Inexpensive consumer services are needed to retain a large scale of users.

We do note that BlackBerry Messenger for Android and iOS has captured 20 million downloads in recent days. We also need to note that WhatsApp has 350 global million users. As a public company, that disparity is a kiss of death for BlackBerry. As a private entity BlackBerry would be able to hail and market those 20 million downloads as significant.

Finally, we need to keep in mind that the Blackberry 10 mobile operating system is based on QNX, which interestingly continues to have a life of its own within the M2M, Internet of Things and telematics world. We wonder if there are ways for BlackBerry to more aggressively involve itself in these monster markets beyond simply being an OEM provider of the QNX platform. It seems entirely logical to do so.

QNX of course also allows BlackBerry 10 to run Android apps, something that at one point seemed a marketing winner but which has since fallen by the wayside as a marketing tool for BlackBerry. Perhaps the new versions of Android (and the apps that are upgraded to them) are too difficult to manage, but we still believe that if BlackBerry can retain a way to stay connected to Android apps it would be valuable to the company.

It's a Small Task

So, to summarize, Chen and his new CEO will need to keep BlackBerry hugely focused on enterprise security and services but at the same time will need to find the right device partner to take the device burden off its shoulders. The right device partner will also greatly help to keep BlackBerry services active in the global consumer markets without BlackBerry itself needing to expend huge resources there. And BlackBerry needs to go private to pull it all off.

It all reminds us of the Wizard of Oz asking Dorothy to simply perform "a very small task" to have her wish granted.

Wizard: But first, you must prove yourselves worthy by performing a very small task. Bring me the broomstick of the Witch of the West.
Tin Man: B-B-B-B-But if we do that, we'll have to kill her to get it!
Wizard: Bring me her broomstick and I'll grant your requests....Now go!
Lion: But - but what if she kills us first?
Wizard: I said - GO!!

It really all does feel that way. The good news of course is that ultimately Dorothy got the broomstick. We'll see how John Chen does.

Edited by Ryan Sartor

TechZone360 Senior Editor

Related Articles

The World is His Oyster: Connected Solutions Enable Daniel Ward to See Food

By: Paula Bernier    3/16/2018

Fresh seafood can taste great, but if it is not handled properly, people can get sick, and that can lead to business closures and lost revenues. That'…

Read More

How to Get Ready for GDPR if You've Waited Until the Last Minute

By: Special Guest    3/14/2018

With less than two months until the General Data Protection Regulations (GDPR) deadline, many companies have already started making sure that their bu…

Read More

How Fintech is Helping Create Global Businesses

By: Special Guest    3/14/2018

The growth of Fintech probably has not escaped your attention. Whether you're a customer making contactless payments or an investor weighing up CFD tr…

Read More

Are We Prepared for Automation?

By: Special Guest    3/13/2018

We are barreling toward a future of automation. A great proportion of the six million US manufacturing jobs that have disappeared over the last few de…

Read More

The Dark Web - A Hot Bed for Cybercrime

By: Special Guest    3/12/2018

There is a corner of the internet that is cloaked from every day users. Beneath the typical search engines and web browsers, an illegal marketplace is…

Read More