Well, the story now is that Blackberry is following Dell’s example and going private. Certainly there are simple financial reasons for that, but I also have to wonder whether some of the same “SOX-think” I talked about with Dell be operating here too. If there’s a turnaround in play for Blackberry it’s going to be a long process, one that’s not going to benefit from having executives pilloried on an earnings call every quarter along the way. Then there’s the issue of corporate raiders who’d try to grab the company (and, of course, still might).
The question is whether there’s a strategy for Blackberry that’s as clean as that for Dell, and I think that the answer is “Possibly”. You have to make some assumptions, but here’s an angle that might be followed.
Start with the big assumption, which is that their version 10 OS is a good one. A number of experts tell me that it is in fact elegant and in some ways superior to both iOS and Android, so I think we can at least say that Blackberry has something it can start with.
The next assumption is that Blackberry has to be thinking along the same lines that a Microsoft executive noted recently, which is that the company has to create a kind of cloud symbiosis. In Microsoft’s case the goal would be to make a set of cloud services an augmenting point for both the Windows desktop/laptop platform of old and the maybe-emerging appliances. Blackberry has always had a mail/message service that was credibly a cloud service so this isn’t too much of a stretch either.
Given these two assumptions, I’d suggest that what Blackberry has to do is to morph its current OS into an expanded model in two parallel dimensions. First, it needs to frame up a microkernel of the current OS, a minimal element that can run on anything and call on “BBcloud” services for functionality. In effect, it’s Firefox OS. But second and unlike Firefox OS, Blackberry has to make it possible to pull more than microkernel functionality into devices that have the capability, either permanently to create something like a traditional phone or tablet or as needed. That means that the appliance becomes an extension of the cloud and not just a portal onto it. Software features migrate between device and cloud.
The third point is that BBcloud services then have to be expanded considerably. What Blackberry needs is the ability to make BBcloud into an ecosystem, something that lets developers build mobile and cloud applications not based on “compatible” code but on the same code. Everything, from apps that are currently nailed to the appliance to stuff that’s not yet written, is designed to be run in BBcloud and hosted wherever convenient. I’d suggest that Blackberry even provide a mechanism (via a “shell”) to run this stuff on a standard PC.
You probably see where I’m heading with this. Blackberry has a framework that looks like an extensible mobile environment, one that lets applications and resources spread out from the device into either local user compute resources or into the cloud. It’s bold enough and powerful enough conceptually to give the company a shot.
The risk, you’ll say, is that whatever Blackberry can do here the other players like Microsoft, Apple, and Google can do as well, and likely better. Yes, but they have two disadvantages versus Blackberry, two related ones in fact. The first is that this sort of ecosystem would likely be seen by all the competition as enormously risky to their current business model. The second is that this risk would be smashed in their face like a pie every quarter, because the competitors are still public companies.
Whether Blackberry (or Dell) sees things this way, it seems pretty clear that “going private” might actually be the way that we get innovation back into our industry. We have VCs who want to fund social burgers that can be put up for next to nothing, run against a small chance of a buyout, and if they win they pay big. It’s like the lottery. We don’t have the kind of financing that builds fundamental tech revolutions out there in VC-land because they see the process as being too lengthy and risky. But if private equity steps in to take a company like Blackberry private, we could have what’s essentially a giant startup with branding, funding, installed base, and all kinds of other neat stuff.
You also have to wonder whether this sort of thing, promising as it may sound, could actually work. Many revolutionary approaches have proven to be ineffective, after all. Australia, who took the bold step of creating a kind of national broadband project with its NBN initiative, is now facing major scaling back, cost issues, and a complete route of the NBN board. It may be that Telstra (the national carrier who frankly should have been doing this all along) will end up effectively “being” NBN or at least running it.
What the NBN thing proves is that the big disadvantage of revolutionary business mechanisms like the go-private-and-scuttle-SOX approach is that nobody has done it at scale and nobody knows whether it will work financially, much less whether the now-private company can pull something together and make it work. The private cloak can hide revolutionary development from shareholders wanting instant gratification (like corporate raiders and hedge funds) but it’s not going to make that revolutionary development happen. Both Dell and Blackberry will have to get their internal R&D processes tuned to a whole new world, where strategy matters a lot, after having lived for decades in a world where it didn’t matter at all. But isn’t strategy how we got to where we are today?