It was only a matter of time before Blackberry went all “fail whale” on the business world again. It couldn’t have happened at a worse time for the struggling company. The landscape around it has changed drastically and its facing competitors to every one of its core value propositions and failed to retain its share of mind for innovation and enterprise dominance.
For the last several years Research in Motion has managed to avoid widespread outages that nearly crippled its growth in the early days of smart phones. The smooth(er) sailing for larger expanses over the last few years buoyed them against the onslaught of both handset (Apple, Motorola, HTC, LG, etc) and OS (iOS, Android, WinMo7) competitors and allowed them to maintain a some of their market share, especially when competitors such as Palm and Nokia were dissipating.
Before the mid 2000s RIM’s servers routinely went down in spurts with disruptions in service here and there as the company struggled to scale it’s routing of data through it’s servers as demand increased. Then, beginning about 2007 the outages became lethally widespread taking down significant portions. CEO Jim Balsillie attributed a BlackBerry e-mail outage to a “process error” that took down the data connectivity. The internal fail-safes and patches to individual handsets was supposed to alleviate the error but sporadic disruptions continued until in the very early part of 2008 the system was down again in epic proportions. More safeguards were instituted, more updates distributed and as the handsets began to become more consumer-friendly it looked like RIM might be headed in the right direction. That was until around the holiday’s of 2009 when another enormous outage took down not once but twice throughout the entire RIM network of services. After that it was only a smaller disruption of certain services in early 2010 leading up to the recent collapse of RIMs data delivery here at the end of 2011.
In some ways, the outages are an annual affair and that is disheartening since it seems to be systemic in nature. The first failure causes a cascading effect that takes down all of RIMs facilities and they seem inept in stopping the cascade as well as unable to deal with the initial disruptions in the first place. Had there not been the cascading effect, perhaps the disruptions would mean less, such as with a carrier’s temporary disruption of local service or a device issue such as Apple’s antena problem. That’s not to say the initial disruption should be disregarded, but knowing any problem can become so widespread produces distrust beyond the initial individual user problems. After all, the secure server system of Blackberry is supposed to be its bread-and-butter, so when secure service breaks down for an unspecified period of time it completely devalues the nature of their value proposition.
OS and software features
For a long time, the knock on Palm was their deteriorating OS, despite it’s early touchscreen technology, application multitasking and data-to-voice balance. Blackberry never suffered that perceptual delusion in their transition from a data driven device into the telephony market. It was well understood what the device could and couldn’t do and what it did for a long time it seemed to do exceptionally well in an arena no one else was able, or willing, to compete in. It offered a seemless offload of data in a secure manner for optimized delivery that allowed the device to handle other processes without lag.
The downside to offloading a lot of the data security to a centralized system the way RIM did was that it was susceptible to other, less obvious yet debilitating problems. While data security for laptops and remote computing was left to IT departments, RIM was taking the risk off their plates by handling it via their terminals when using their handsets, plus the experience was optimized, meaning it could (and easily was) possible to get an email via your Blackberry before it even pinged your exchange server and hit your desktop in the office. When the system went down however, as it sadfully did too often, it created all too tight a necktie in the businessworld. Leave too many enterprise users without email access and you disrupt the overall momentum of our model.
Furthermore, despite the optimizations granted through the off-loading, the RIM OS was severely hog-tied compared to any of the competing OS. Afterall, any one willing to pay for a licensing key could develop on Windows, or willing to partner with Palm could develop for their OS and J2ME had more than its share of developers, while RIM held tightly the proprietary of its OS for too long.
When Apple jumped into the fold with it’s monumental iOS development standards were set at the renowned Apple level, which meant jumping through hoops that hardly made sense. It was a melee of circus to get in, but once one broke through Apple’s asinine accreditation the potential for success could easily be realized and as long as you played by the well defined ideas you could create using a fairly open source code. All of the hurdles aside, it was easy enough to understand the premise and create a functional (and fun) app for the iPhone (and its sister iPod in the iOS) that developers flocked to it and for the first time the mobile community there was a reason to “produce code en masse.”
Android made it even easier to develop for a platform by going completely open-source. The upside was even less obsiticals (no payments like WinMo6, no accreditation like Apple and initially not as much variance and user restrictions as J2ME / BREW) but the downside was the ever-fragmenting version of the OS as each manufacture gave it a customized spin and each carrier packaged it more and more bloated with their own features. Never-the-less despite an ever crowded store front with relatively little differentiation for aps, programmers were able to quickly and easily iterate for success on the platform.
The carriers began to open their own app storefronts for customization trying to regain the gateway of their past with WAPdeck technology. Albeit late to the party, they positioned entries to their ever expanding marketplaces wholely in front of those from some manufactures and OS platforms. Furthermore, with a few short clicks alternative storefronts where also positioning themselves in the marketplace by any number of differentiators and individual brands were developing to the platform codex for native experiences rather than traditional browsable sites.
This worked agaist the walled garden, centrally-optimised mindset of RIM. In order to develop either BBB optimized mobile web experiences or native mobile aps for the BBOS took a great deal of developmental care. It required a unique user experience to climate to the odd screen sizes across the model line, the trackball interface and the distinct version of the BB experience overall plus all the backend technicalities. Unlike porting large portions of base code on the backend or frontend UX ideas from OS/handset combo to the next, Blackberry wasn’t even streamlined at times in its own development experience thus hindering its ability to attract top end talent to develop for it even within its partners.
Blackberry always seemed to struggle in finding a breakthrough device for the general user. As the PDA market began to become actual smart phones devices like the Palm Treo, they failed to lead the way transcending the enterprise environment into general use. Blackberry’s sole “successful” entry into this market might have been the workhorse Curve line which sported at the time a small, firm hand-feel, responsive QWERTY keyboard, fairly quick processing and the ability to download ad-ons (before the hip terminology “aps” really took root) and a hipper nature that made it easy to carry in social situations. It followed though a lot of prescience set by other manufactures and unfortunately began to hit its stride as Apple introduced the first iPhone. In positioning itself as the anit-iPhone with it’s keyboard and enterprise-meets-social nature (thanks to BBMessenger), the Curve line managed to maintain its market share even with the Apple hype.
However, in the face of successful devices such as the HTC Dream (the TMo G1 & G2 back in the day), Moto Droid and and 5 iPhone models that hasn’t held true. Even lesser knows, like the heavily hyped (and exceptionally functional, albeit not-so-sellable) HTC Nexus One and several Samsung and LG Android devices as well as some interesting Winows powered machines have further eroded the Blackberry mind-share, which, in turn hurts the bottom line sales when people make that final purchasing decision.
The perception is there are hipper, cooler, sleeker, faster and most importantly, more reliable
Then, the question becomes, is this a RottingBerry we’re holding in our hands?
From an enterprise standpoint, traditionally, IT departments necessitated meeting only a few basic requirements 1) seemlessness of maintenance / upgradability and 2) cost efficiency with somewhere in there 3) security, 4) reliability 5) user acceptance. For a long time Blackberry managed to balance the five requirements fairly well, at least by IT standards. Once other OS/handset combos became more popular IT departments began to feel the push-back on user acceptance, especially in light of reliability and this eroded RIM’s dominance in enterprise despite the obviously other benefits.
Moreso, however, the general public’s mind the order of operations for determining vale is hardly a mirror of enterprise IT. Reliability probably comes first (of the many examples: the PR hit AT&T took in light of it’s perceived inability in a select few markets to handle the influx of iPhone traffic on it’s network), then some combination user acceptance (we’ll call this cache’, so that users will pay a premium for a brand identity, such as back in the day with the Moto RZR or early on with iPhone) and cost efficiency (though it varies from IT in foundation it’s the same underlying concept).
RIM’s failed to deliver to either of the two primary user bases and the make-good hardly speaks to the core of either when trying to maintain the user!
The free software will be made available over the coming weeks on BlackBerry App World. The premium apps, which typically cost $5 to $15 each, include program for enterprise and games for users, neither of which could not be gained at the same “free” cost on the other app stores or, at worst, a a lesser cost than full price when switching between handsets / carriers in order to rid one’s self of the Blackberry headache they inhereted with the device.
The free technical support will be available to corporate customers, there was nothing noted in what I read about non-enterprise customers. Enterprise IT probably welcomes this for solving some of their problems, but it hardly scratches the surface overall for what IT has had to deal with for the outage, nor does it stand to bring them any mid-to-long term benefit in maintaining the system. As for regular users who would likely need more help if the now “free” apps failed or they ran into other upgradable problems, they are apparently still left in the cold despite the service disruption.
There’s nothing in the make-goods about crediting accounts for the lost air-time or providing above-and-beyond type service enhancements to demonstrate the uniqueness of RIM’s offering. Rather, it comes across as a passive here’s what you might have missed while we were down that we’d like to make money off of you in the future from so enjoy it while we’re giving it away for free. That’s not to say that in RIM’s mind these Blackberry products and services don’t equate to the same financial loss, but the question really is in the vast array of consumers minds if they are enough to overcome the problems.
If switching costs were what they were back in the day and enterprise level devices were expensive enough to thwart migration it might be enough to stem a wholesale defection. The problem is there are enough close-to-enterprise ready devices available and enough corporate users willing to pay a premium for what they want (see personal users cache identity) as well as enough personal users who are willing to jump handsets without the corporate restrictions and understand very little brand loyalty in the market (apart from the established iPhone or perhaps the growing MotoDroid cache) there should be adequate enough reason for RIM to worry on the Blackberry handset front with its deteriorating share (mind & market). Furthermore, the OS side is not nearly as compelling as any of the other smartphone competitors, even with WinMo7 languishing on what seems like the sidelines to this point. The benefits of moving from the software standpoint might outweigh even the handset obligation. In most cases, data is transferable even beyond the simple SIM requirements because of the cloud and re-configuration has become increasingly simple. Compounded with the fact that, if worse comes to worse, user can play the carrier card. Because RIM devices are available on all carriers essentially of equal offerings, defection in order to get away from RIM to an exclusive device of better value on another carrier can play into the consumer’s leverage.
Next Tuesday’s Pickings
Everything on the farm has a shelf-life, and the most recent BB outage may not even be a note in next weeks papers. Probably, that’s the case and people soon forget the inconveniences they experienced. After all, well all forgot when Google’s gmail and Twitter went down regularly or Amazon’s Ec3 servers and Sony’s Playstation collapsed once they all went back up stably… However, if it is long-term memory, BB had better rethink its damage control and do it with authority. But even if not, ensuring that the quick to trend quick to dissipate mentality does happen, there’s enough establish complexity in the BB-to-consumer relationship that needs to be addressed ASAP internally to ensure this kind of blackberry eye doesn’t happen again. Not knowing the company’s internal practices, it’s impossible to speculate what those changes are but they’d better be in the works proactively should RIM home to survive long enough to, well, say buy a NHL team and move it to Hamilton, for example…