A return to the 80’s

Remember the 80’s? The 8-bit and 16-bit computer era where fragmentation was the norm and each computer company produced its own operating system?

It’ back!

This time around we’re in the 64-bit space and computing has become ubiquitous. Which poses some challenges for the likes of Dell, HP and now Blackberry - especially now that we have a quasi resolution to the Microsoft-Nokia relationship. How does the new world look like compared to the 80’s?

Apple is still Apple and still owning the platform end-to-end (leaving out that dire period in the 90's). In addition, it successfully (revenue wise) expanded beyond computers and now includes embedded devices and Internet services (which makes up over 70% of their business) - something that today’s Microsoft could only dream about.

Microsoft is now Atari+Commodore in the late 80’s or where Apple was in the late 90’s. Except that Microsoft doesn’t really have any money woes for the foreseeable future due to it’s still very much intact cash cow and thus has the luxury (maybe too much luxury) to experiment within its new world.

Google is becoming the Microsoft of the 90’s and early 2000’s -- especially given it’s Android installed base.

Dell, HP, and others are rapidly becoming niche players that resemble IBM in the late 80’s and early 90’s (and they desperately want to become the IBM of the late 90’s).

What about Blackberry then? The short answer is that Blackberry will be sold for scraps. The good news is that there is still value. Blackberry’s three value components (highly subjective of course):

  • Enterprise software (BYOD management and messaging suite)
  • QNX realtime operating system for embedded devices (with Android compatible layer)
  • Hardware/Device business

While there could be many potential interests for the Blackberry’s enterprise software, the question is if any of these companies will make a play for it. One interesting opportunity might be for IBM since Lotus Notes is still somewhat popular and Blackberry has native support for it. Another opportunity might arise for Good technology - there might be an interest in scooping up the messaging piece (I’ve suggested Blackberry should scoop up Good technologies a while back but the tables might have turned).

The likes of Samsung, HTC, Asus, Lenovo might be interested in picking up all of Blackberry for a variety of reasons - end-to-end control for one, but also they might be able to better utilize the QNX platform that Blackberry acquired (and that is still used in embedded systems).

Dell and HP could be interested in various bits - Dell for example has no mobile strategy whatsoever and could buy a turnkey business solution - but that would almost always stay a niche product due to all the BYOD activity and the fact that it would be suicide to compete with Apple and Microsoft (or Samsung for that matter) as Blackberry already experienced. Speaking of BYOD, both HP and Dell might be interested in the BYOD management piece that is part of the enterprise software.

HP itself is in the midst of trying to turn around a fledgling company with a course correction to move back into the enterprise space: first with killing the acquired Palm WebOS (ex. Be) operating system and then with the acquisition of Autonomy.

Dell is in a similar position as HP, the difference is that Dell never really invented anything. Dell is primarily a logistics company with a direct sales channel to the consumer and the enterprise. But Dell too has realized that the margins are much better with enterprise service deals and that the margins in the commoditized PC land are only going to get thinner. The only thing standing in the way of Dell making this move is the buyout (if it ever happens) and a bunch of other companies that play in this turf - you know companies like IBM and Oracle.

So my predictions for BlackBerry are as follows:

For the device and operating system business, there are several opportunities for someone like Samsung to step in and snap it up - but more likely, it is a smaller competitors that tries to create a distinguished user experience while keeping complete control - there are several cash rich Chinese manufacturers that could profit.

The enterprise software business will likely go to either Dell or HP - each company will have it’s own angle to play but generally the interesting part is to keep the existing licensee renewing the messaging licenses and trying to upsell them. The actual client solution needs to be ported to iOS and Android (and soon Microsoft).

Let’s see what happens with BlackBerry.