Ailing BlackBerry Is a Patient That Can Be Cured, Says CEO John Chen
BlackBerry’s chief executive John Chen likens the company he heads to a patient in serious need of medical attention.
And he is the surgeon.
“I would really kick myself if I don’t try it,” Chen said in an interview with Re/code. “Any normal exec or CEO would have probably said ‘I want a safer, easier job.’ I am abnormal.”
Chen’s treatment plan: BlackBerry needs to get back to its roots serving businesses, especially those in regulated industries, such as government and Wall Street, Chen explained. In those areas, BlackBerry still does not have a larger rival. But the company needs to act fast. Those who are using BlackBerry devices are, for the most part, using ones based on old versions of the company’s operating system.
The challenges faced by the well regarded former CEO of Sybase aren’t all that different from those he faced years ago when he was brought in to save that company. At the time, the company was struggling — and struggling against big-name players such as Microsoft and Oracle.
The first key to BlackBerry’s turnaround is to work with businesses that are using BlackBerry’s server software, since they are the ones most likely to stick with the company. The latest version of that software, known as BlackBerry Enterprise Service 10, can manage iPhones and Android devices as well as BlackBerrys old and new.
But while 30,000 of the company’s 80,000 business customers have a BES 10 system in place, many of them are trial customers. Chen said a big part of his task is to convert the large but unspecified number of businesses testing the software into paying customers. From there, he hopes to start selling more BlackBerry-based handsets, too.
“I think I am going to sell the server first,” Chen said. “The server will lead the device sale.”
He didn’t give specific sales targets, but said he hopes to have solid numbers on both fronts to tout when he speaks at the Code Conference in May.
But even as it pursues expansion in some areas, Chen said, BlackBerry needs to continue its corporate diet, with the company likely to be smaller a year from now than it is today — and BlackBerry has already undergone some serious belt-tightening. At the same time, the company needs to invest in a couple areas, particularly its enterprise sales force and the server software development team.
Among the areas where Chen is scaling back is hardware projects, noting that he has killed a number of specific phone designs that were in the works when he joined two months ago.
The device business, Chen said, is tougher than the software part of the equation because it is so hit driven.
“It’s just like the movie business,” he said. Chen knows it has been a long time since BlackBerry had a hit, but said the company still has an opportunity to put out BB10-based devices that people will actually want to buy.
Those phones that BlackBerry does make will be built in large part with the help of Foxconn, with physical keyboards being a key feature on most devices.
Chen also wants BlackBerry to get closer to customers. As part of that plan, BlackBerry will open a major sales office near Wall Street customers in New York, a security research facility near its Washington, D.C.-based federal government customers and a Bay Area-based engineering office, he said.
“Over time I might build some more,” Chen said.
He’d like to have engineering talent at a number of sites around the world, but knows there are more pressing matters in his bid to turn around the struggling phone maker.
Chen sees two other businesses as part of the company’s future. First is the BBM messaging product, which has lost a lot of ground to WhatsApp, Line, iMessage and other products. But Chen noted it still has 83 million active monthly users, roughly half of whom are on Android or iOS devices.
To stay relevant, Chen said, it is important to see that number continue to grow. He pointed to a recent deal with Korea’s LG to preload BBM on its Android smartphones as an example of this strategy.
But perhaps the most important opportunity for BBM is to focus on features that businesses want, especially around security and manageability.
The other area with room to grow, Chen said, is the QNX business. BlackBerry bought QNX to form the heart of its revamped phone operating system, but QNX also has a strong position inside cars. Chen said there is an opportunity to expand its role in the car as well as other markets where machines are talking to machines, such as manufacturing.
One area where Chen isn’t spending much time is looking back at how BlackBerry got in the mess it is in.
“How you get sick is not the concern of the doctor,” Chen said. “The concern is how to fix you.”
He admitted that the surgery is not without major challenges, including some recalcitrant management and a customer base that has not gotten needed care and attention.
“If you are an emergency room doctor, you should not be afraid of the blood,” Chen said.
Chen sounds and acts like a man who is in this for the long haul. Until this week, BlackBerry was describing Chen as interim CEO, but the company says “the search for a CEO has been put on the back burner for now.”