RIM Might Survive as a Software Company

By Wayne Rash  |  Posted 2012-07-01 Print this article Print

But perhaps RIM would do better getting out of the hardware business entirely. Perhaps the company could license its software to other companies, and retain control of the BlackBerry data-delivery network. BlackBerry Enterprise Server would be impossible to replace for many of RIM€™s biggest customers and BlackBerry email works better than pretty much everything else.

Moving to a software-only licensing model would mean that RIM would be a smaller company, but it could provide the software platform that its customers depend on, a level of security that€™s not available elsewhere and give its customers confidence that the company isn€™t going away. It would also prevent existing and potential customers from abandoning BlackBerry purchases, since they would know that their devices would keep working, even if someone else started making them.

Right now, the biggest fear that BlackBerry users have is that they€™ll be abandoned. If RIM dies, they don€™t just have an orphaned device, they have a device that can make phone calls and send Short Message Service communication and not much else. Those functions that depend on BlackBerry servers, and that includes all email, will die with it. That alone is enough to have existing customers looking at alternatives. If your existing customers abandon you, you€™re toast, because you lose the revenue to keep the network running.

Fortunately, RIM still has options. The company has $2 billion in the bank and no debt. With the cutbacks that were announced along with the earnings call, the company can stay alive a while longer, but doing so may be like eating your seed corn: You stay alive, but there€™s nothing left to build on for tomorrow. Your life is prolonged, but the ultimate outcome doesn€™t change.

What this boils down to is that RIM needs to make some tough decisions, and it needs to make them quickly. They can sell the company to someone else, perhaps Microsoft, which badly wants to be a force in the enterprise phone market. They can move to contract manufacturing, which would save money, and perhaps result in greater agility and maybe even a better product. Or RIM can become a software company. But at this point, it doesn€™t seem that going it alone and hoping for salvation in the form of BlackBerry 10 is the right answer.

Wayne Rash Wayne Rash is a Senior Analyst for eWEEK Labs and runs the magazine's Washington Bureau. Prior to joining eWEEK as a Senior Writer on wireless technology, he was a Senior Contributing Editor and previously a Senior Analyst in the InfoWorld Test Center. He was also a reviewer for Federal Computer Week and Information Security Magazine. Previously, he ran the reviews and events departments at CMP's InternetWeek.

He is a retired naval officer, a former principal at American Management Systems and a long-time columnist for Byte Magazine. He is a regular contributor to Plane & Pilot Magazine and The Washington Post.

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