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Sunday, February 10, 2013

Blackberry and Dell want to switch markets

Two major players in the information technology industry announced major changes that they hope will help their organisations reinvent themselves and survive in the age of IT consumerisation, bring your own device and cloud computing.
One is Dell, which undertook a $24bn buyout to take the firm private this week; the other is the company formerly known as Research in Motion (RIM), now reborn as simply Blackberry, which launched its overhauled Blackberry 10 operating system last week.
In case you've missed all the excitement, here are the salient points of Dell's and Blackberry's future plans.
Dell's leveraged buyout, which involves Silver Lake Partners and a $2bn loan from Microsoft, is intended to allow the company to move out of the public and shareholder spotlight and refocus on becoming a end-to-end enterprise IT provider, along the lines of IBM or Oracle.
In a letter posted on the Dell website on Friday, company founder and CEO Michael Dell explained that "secure, easy to manage, end-to-end solutions from the cloud to the datacentre to devices remain at the core of our value proposition", adding that Dell wants to focus on "delivering a fantastic customer experience and creating value for your organisation".
With the major launch of the Blackberry 10 mobile operating system and the more minor name change, the Canadian smartphone maker is hoping to turn around its flagging fortunes, disassociating the firm from the old RIM brand and relying on the stronger Blackberry moniker.
Along with the totally overhauled OS come two new devices, the iPhone-like Z10 and the upcoming Q10, which is more of a traditional Blackberry with a full Qwerty keyboard and small touchscreen above.
So how likely is either firm to succeed in its intentions? The key indicators for me are the firms' target markets and messaging around the changes.
The Blackberry name change in itself isn't exactly imaginative and is unlikely to have much impact on the firm's chances of success. Most of its customers, both business and consumer, were probably unfamiliar with the RIM name and only thought of Blackberry anyway.
However, it can't hurt Blackberry to put as much space as possible between its ongoing operations and the woes that befell RIM - the outages, the encryption saga, the hapless executives.
But what stands out here is the discrepancy between Blackberry's target audience and who is actually using its devices. As many have pointed out, the Z10 is very iPhone-like in its look and feel, and the firm is clearly going after the broad consumer market with adverts for the device appearing in places like commuter paper Metro and during last weekend's Super Bowl.
But while Blackberry Messenger (BBM) was the craze with teenagers for a few years, they've long since moved on to Apple and Android, and the firm must remember that it actually achieved its initial success by going after one clear goal - being the de-facto enterprise mobile device.
There are still plenty of enterprise customers using Blackberry due to its Blackberry Enterprise Server (BES) product, but these will soon dwindle away now that the firm isn't doing as much to highlight the innovative features it's adding for business users and persuade its corporate customers to stick with BES.
Compare that to Dell, which has almost the opposite problem to Blackberry with its heritage in consumer hardware that it now wants to shed and evolve into an enterprise IT provider.
Dell made unsuccessful attempts with its Streak range to break into the tablet market, but having realised this was not going to work, it withdrew them from sale and instead gave its full attention to building out its enterprise IT arm with purchases like thin-client firm Wyse, enterprise software firm Quest and IT services firm Perot Systems.
The wording of Michael Dell's message today, with its reference to security, manageability and cloud services, makes it very clear exactly what type of firm Dell wants to be and its recent acquisitions are evidence of how it plans to achieve this transition from hardware maker to enterprise IT vendor.
When I think of the successful IT players, those still raking in the cash despite the downturn, the names that jump to my mind are Apple, Oracle, IBM and Samsung. What links these firms is that they all have a very clear target market. Yes, Apple and Samsung are the darlings of the enterprise when it comes to staff choosing their own handsets, but neither firm spends any time or marketing budget going after the business base. Instead, you'll find Galaxy and iPads adverts plastered all through glossy lifestyle magazines, on video billboards at shopping centres and on prime-time TV slots.
IBM and Oracle have carved out clear paths as core enterprise technology players, shedding unwanted consumer divisions like the IBM PC arm sold long ago to Lenovo. When it became obvious that mobile was the future for the corporate world, neither firm rushed to snap up a mobile vendor, like HP with its ill-fated Palm buy, and instead they fleshed out their own offerings through R&D and acquisitions to support their business customers' mobile requirements.
Dell and Blackberry both have rocky roads ahead. But Dell might have the slight upper hand in that it's clear that it wants to be a purely enterprise player, like an IBM or an Oracle, while Blackberry is making all the appearances of wanting to be a consumer smartphone provider, like an Apple or Samsung, but without having the confidence to come out and say that's where it thinks its future lies.

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