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Blackberry CEO John Chen's Turnaround strategy has put blackberry on its way to profitability

BlackBerry rode high From 2005 to 2009, the BlackBerry brand dominated the smartphone market in the U.S., with models on every carrier. The ...

BlackBerry rode high From 2005 to 2009, the BlackBerry brand dominated the smartphone market in the U.S., with models on every carrier. The OS advanced gracefully, adding media features but staying focused on messaging. Nothing could match BlackBerry's reliability for business customers. BlackBerry was made for success, releasing "close to epic" phones from the BlackBerry Curve and the bold lines which were some of the best phones of that time. 2011 was the year BlackBerry saw its highest profit margins with stock prices of about $100.


Just like Nokia, RIM got lazy and lost focus. In an effort to reinvent themselves, they released the BlackBerry Playbook tablet announced April 19, 2011, by far the worst product Blackberry had ever made. The system was terribly slow for anyone to use. In a second attempt, they also released the BlackBerry 10 devices: the BlackBerry z10 and Q10 which like the playbook was based on the QNX platform but these were the first phones to use the BlackBerry 10 operating. It fell somewhat short of expectations and the fact that developers were not so interested to develop apps for the eco-system made it fail woefully.


This turned things around for BlackBerry. Their stock prices fell tremendously from $100 in 2008 to about $6. Massive losses for RIM. They were at a standstill and RIM was no longer profitable. BlackBerry saw significant decline both in their revenue figures and their share of the global and US markets.


In 2013, BlackBerry brought in a fixer, John Chen as interim CEO of BlackBerry. Though Chen has worked in a number of executive positions over the years, he was best known for his time as CEO of the enterprise services company Sybase, once a competitor to tech giants like Oracle. Sybase fell hard in the late 90s. Sybase’s fortunes were so bad that one research firm had pegged it with a 70 percent chance of failure when Chen stepped on board in 1998. The company was reportedly worth just $362 million then, but after 13 years under Chen, it was acquired $5.8 billion of net worth.


Chen spent the first five years at BlackBerry trying to turn things around. He focused his turnaround efforts on growing sales for software and security products, since BlackBerry had failed as a phone maker, these were the strong points they had left. BlackBerry is good at security and enterprise services and their security services are used by cooperate individuals in their phones and other enterprise products. People did not necessarily use BlackBerry phones because the devices were particularly awesome or because of their physical qwerty keyboard but because it provided good if not excellent security for cooperations and companies.


John Chen's strategy to capitalise on these assets BlackBerry built-in security, mobility and productivity in the enterprise software market has been successful and is proving to be profitable for BlackBerry, but this meant pivoting from a hardware company to a software company which is what BlackBerry actually is now, changing the entire infrastructure to support a new economic model. It meant a new strategy, one that enabled them to provide a standard of security that manages the network of endpoints within the enterprise space.


BlackBerry's CEO John Chen came up with a strategy he referred to as the "five pillar turnaround strategy" which based on:



Product Platform:


BlackBerry built on BlackBerry Secure which is a comprehensive mobile native approach to security that and it addressed the entire enterprise from endpoint to endpoint. BlackBerry refers to it as the standard of security in the enterprise space.


BlackBerry described Secure as a mobile security platform for the"Enterprise of Things (IoT)." The technologies that originally came under the BlackBerry umbrella through acquisitions of companies such as Good Technology, WatchDox, AtHoc, and Encription build the basis of BlackBerry Secure. BlackBerry called security threats the "biggest roadblocks" to realizing the potential for IoT in the enterprise. BlackBerry's BlackBerry secure platform was designed to be the foundation that drove its move to software. With any IoT deployment comes constant communication between people and their devices, and between the devices themselves. Computers, smartphones, trackers, industrial equipment, and anything with a connected sensor could be a part of this ecosystem. Once it is, though, protecting the transportation of sensitive data becomes paramount, and that is where BlackBerry Secure came in.



Shifting Target Market:


Since BlackBerry has shifted its focus to services in mobility and security and is now gaining grounds in the Cyber-security, automotive and enterprise industries, it is only logical that those who bought the BlackBerry phones will not necessarily need these services. BlackBerry had to change markets. Cyber Security is the body of technologies, processes and practices designed to protect networks, computers, programs and data from major cyber threats, such as cyber terrorism, cyber warfare, and cyber espionage. In their most disruptive form, cyber threats take aim at secret, political, military, or infrastructural assets of a nation or its people. The Enterprise Cyber Security Market is a global one and this is a huge opportunity for BlackBerry. You don't necessarily need more equipment or physical locations to take care of clients all over the world. BlackBerry is able to get clients like manufacturers governments and enterprises. The global Enterprise Cyber Security Market, for example, can include organizations such as Government institutions, Educational institutions, Enterprise, Financial institutions, Medical, Automobile institutions and more. The scope of this market is much more appreciable in size and demand can be met up without most of the investments and logistics needed for to supply physical products.



Licensing.


BlackBerry has come up with a licensing, developer, partner and sales strategy befitting an enterprise software company. BlackBerry is now licensing its brand to select third-party manufacturers who build, distribute, market and sell BlackBerry branded smartphones. BlackBerry announced one of its first licensing agreement with Chinese manufacturer TCL Corp, giving them the right to use its brand on future phones and sell them around the world. With that, TCL made two phones for BlackBerry using off-the-shelf parts and blueprints: the touchscreen, the Android-equipped DTEK50 and DTEK60 and also the BlackBerry KEYone. This gave BlackBerry the chance to discontinue handset hardware development and fully leverage third parties to develop hardware and distribute and support the BlackBerry handset brand. Through this strategy, there will continue to be BlackBerry-branded devices in the market; and their logo on these smartphones meant security with their class-leading enterprise software to devices secured by BlackBerry software. BlackBerry also saw this as an opportunity to expand the mobility choices available to their customers by bringing BlackBerry security and productivity applications to a wider audience across multiple platforms and devices. BlackBerry also made BlackBerry Hub, Calendar, and Password Keeper applications available on the Google Play Store for use on a wide range of Android smartphones.


BlackBerry software remains one of the most secure and comprehensive ways to connect people, devices, processes, and systems for today’s enterprise of things.



Excellence:


BlackBerry is striving for excellence in the areas it has shifted to, that is software and security support enterprise software and operations to exceptional levels. They set out to reconfiguring themselves from the inside out to support enterprise software, adjusting their R&D, personnel, and operations to reflect the new vision of the company.



Sustainable Growth:


BlackBerry aimed at growing and being profitable in these areas of venture. With the failures they have had with their previous projects like the playbook, BlackBerry cannot afford to be reckless here. So building a good product that can sustain growth is paramount.


This strategy has paid off and Chen feels that BlackBerry has successfully pulled itself out of the turnaround and the dire circumstances it faced before he took over in 2013 and is now seeing industry standard growth.


BlackBerry Ltd (Nasdaq: BBRY) stock jumped more than 17 percent on Thursday 28 September 2017 after the company reported record software sales in the second quarter. In addition, BlackBerry delivered a surprise profit and exceeded revenue expectations. BlackBerry reported second-quarter earnings per share of 5 cents on revenue of $249million. Analysts had been expecting 0 cents. It delivered a record $196 million in software and services revenue and a record non-GAAP gross margin of 76 percent in the second quarter.


"I would not call us in a turnaround mode anymore," Chen told Bloomberg TV in January. "We make money, we generate growth in the right areas." "The next leg of our growth is with auto" Chen disclosed in that interview.


BlackBerry has now made a deal with Baidu to jointly develop self-driving car technology using BlackBerry's QNX platform. It will serve as "the foundation for Baidu's Apollo autonomous driving open platform." At the North American International Auto Show this January 2018, BlackBerry CEO John Chen unveiled a BlackBerry cloud-based cyber-security product called Jarvis, built for connected and autonomous cars. Which can scan automobile code for vulnerabilities on inputs and outputs for both standard and manufacturer-defined protocols, and automatically identifies any bugs, potential exploits and nonconforming code.“Future cars will have half a billion lines of code, from 50 to 100 different providers: a humongous mobile computer running around the world,” said Chen. “We want to secure all those endpoints.”In comparison, the most advanced current model cars run about 100 to150 million lines of code, mostly provided by the manufacturer or a few close partners. That code is painstakingly reviewed by security teams, as the costs of failure or a security vulnerability are staggeringly high. A system like Jarvis is essential as cars move from software provided solely by the manufacturer and a few chosen partners to something closer to a smartphone or personal computer, where code can be deployed by a wide range of providers, often without the manufacturer having access to the original source code. BlackBerry’s Sandeep Chennakeshu demonstrated Jarvis' abilities using an infotainment engine containing over 20,000 files, where Jarvis was able to identify over 41,000 vulnerabilities. In another example given by Chen, Jaguar Land Rover was able to reduce the time to assess code on a connected vehicle from 30 days to 7 minutes – and Jarvis correctly identified more security issues than the team of security researchers.


This direction has put BlackBerry in a state of recovery which has seen increase in BlackBerry's stock prices. This has made the BlackBerry's board of directors happy and on Thursday 15 March 2018, they gave out a press release announcing John Chen's contract extension, BlackBerry’s board of directors expressed “tremendous confidence” in Chen, saying “John engineered a successful turnaround and has the company repositioned to apply its strengths and assets to the Enterprise of Things, an emerging category with massive potential.”


His position as CEO of BlackBerry will be maintained for the next five years, that is up to 2023 with compensation valued at close $150 million in total as reported by Techkrest.

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Techkrest | Tech That Matters: Blackberry CEO John Chen's Turnaround strategy has put blackberry on its way to profitability
Blackberry CEO John Chen's Turnaround strategy has put blackberry on its way to profitability
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https://www.techkrest.com/2018/03/blackberry-ceo-john-chen-turnaround.html
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