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Inside BlackBerry’s Device, Smartphone Channel Strategy

Alex Thurber

Alex Thurber

John Chen

John Chen

BlackBerry CEO John Chen remains serious about rebuilding the company’s mobile device/smartphone business. Enter Alex Thurber, senior VP of global device sales. Thurber, a seasoned channel veteran, joined BlackBerry (BBRY) in April. After six weeks on the job, Thurber came to the phone — participating in a ChannelE2E interview yesterday.

At first glance, Thurber faces an uphill battle. Some Wall Street pundits want Blackberry to abandon the smartphone and mobile device market. After losing the smartphone wars to Apple and Samsung, it’s time to focus instead on BlackBerry’s enterprise-class mobile security offerings, critics say.

Unfazed by such statements, Chen believes the company’s device business can generate profits by September 2016. He’s delivered dramatic business turnarounds before — having saved Sybase before ultimately selling that database company to SAP for $5.8 billion in 2010.

Chen arrived at BlackBerry in 2013 just as the company was teetering on bankruptcy. He scaled down the company, focused on enterprise mobile security software and rethought the device business.

Fast forward to present day, and BlackBerry is seeking to accelerate sales of its Android-powered PRIV smartphones, with additional device launches in the pipeline. To build the device business, conventional wisdom says Thurber must focus on carrier and telco relationships. But take a closer look and you’ll discover that he’s crisscrossing the globe and meeting with key sources to formulate a broader channel strategy that includes IT distributors and VARs.

Indeed, Thurber confirmed plans to hatch that type of channel-oriented strategy in a ChannelE2E interview yesterday.

BlackBerry Device Sales: Getting Onboard

Before we discussed BlackBerry’s channel strategy, I mentioned the elephant in the room: The overall device challenge.

blackberry-privAfter all, BlackBerry sold only 600,000 phones in its fiscal Q4, which ended Feb. 29, 2016, Fortune notes. That’s less than half the 1.3 million handsets sold a year earlier, the publication said. By contrast, Apple sold almost 822,000 iPhones per day—a total of almost 75 million—in its fourth quarter, Fortune noted.

My question: Why did Thurber decide to join BlackBerry to lead device sales at a time when some Wall Street pundits think the company should exit that market?

The answer involves a journey of discovery for Thurber. The journey starts in 1999, when Thurber was climbing the sales and channel ranks at Cisco Systems. He eventually led the company’s go-to-market strategy for security, mobility and emerging technologies at the company. By 2009, he jumped to McAfee and oversaw the company’s worldwide channel. Then came VP-level channel and sales positions at Tripwire and WatchGuard Technologies. At WatchGuard, he led a major sales turnaround.

About a year ago — while still at WatchGuard — Thurber read Losing the Signal, which documented BlackBerry’s dramatic fall from grace. He describes it as a “cautionary tale about becoming powerful and out of touch with your market.” Thurber purchased copies and shared them with the WatchGuard team to help ensure the company remained properly focused on customers, partners, employees and R&D.

Around the same time, Cisco veteran Carl Wiese jumped to BlackBerry as president of global sales. Next, Cisco veteran Richard McLeod joined BlackBerry as global VP of enterprise software channels in November 2015. Fast forward to February 2016, and Wiese reached out to Thurber about leading device sales at BlackBerry.

BlackBerry: Experienced Turnaround Team

Upon meeting CEO John Chan and the executive team, Thurber was impressed with the sense of loyalty across the organization. Indeed, several executives previously worked with Chen on the successful Sybase turnaround. The team believes they’re leading a similar turnaround journey at BlackBerry.

And Thurber wanted in. “My first device was a BlackBerry,” recalls Thurber. “It’s an iconic brand. And at this point in my career, who I’m working with is just as important as what I’m working on.”

Of course, Thurber had to believe in BlackBerry’s R&D before making a career move. Without sharing specific details, he simply says, “We’ve got a great roadmap over the next year or so.”

BlackBerry: VARs, Distributors and Channel Partners

Thurber is now six weeks into his job at BlackBerry. At first, he felt inundated with information — and it took time to sort through the data. The first priority was simply focusing on day to day sales execution. The next priority? Starting to engage traditional security VARs.

Richard McLeod

Richard McLeod

Carl Wiese

Carl Wiese

The big picture goes something like this: BlackBerry has a range of enterprise products and services focused on enterprise mobility management (Good), security (BES), identity management and more. At the same time, BlackBerry also has its device portfolio.

No doubt, Thurber will find synergies between the device group and the enterprise software group, where Carl Wiese and Richard McLeod bolstered the enterprise partner program in May 2016. But Thurber sees the opportunity to build net new channel relationships on the device front as well.

“We have a great security story with BES and our devices,” says Thurber. “And I have a background in the security channel. So how do we take the secure device and promote it more into the traditional VAR and reseller channel? The true security VAR talks about end-to-end security. And they need to extend that conversation to the smartphone, because mobile phones are a huge attack vector.”

Pure Channel Strategy, Including SMBs

The effort will involve a “100 percent channel sales strategy,” Thurber says, though he also plans to hire a high-touch sales team to help partners win business.

The obvious targets are government, healthcare and financial services — vertical markets that demand highly secure devices. But Thurber also plans to pursue SMB channel partner opportunities. “I think SMB is untapped for us,” he says. “We can debate the size of those businesses all day. But here’s the thing. BES 12 EMM has an online version. I want the channel to take that and devices to smaller business customers. It’s an underserved market.”

Surely, Thurber is formulating some key plans. At the same time, Chen is still promising Wall Street that BlackBerry’s device business will stop losing money by about September 2016. To me, that sounds like a high-pressure situation for Thurber. But at this stage in his career, Thurber seems to be enjoying the journey. And don’t forget, BlackBerry’s overall business has largely stabilized — a big improvement from the bankruptcy rumors of 2013.

For the moment this story remains incomplete. When Thurber and I ended yesterday’s discussion, he was heading to his next airport. His next business destination? Surely, it involves meeting a VAR, distributor or channel influencer — and plenty of talk about BlackBerry devices.

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25 Comments

Comments

    walter obermayr:

    Please keep BlackBerry device. I love it but I don’t like Android.

      derrick:

      Absolutely

    Cyn:

    Great turnaround start when iconic people stand next to iconic brand. If Apple could Blackberry can.

    sandeep:

    BlackBerry should keep BlackBerry 10 OS running for couple of years to see sucess. Many people love the OS.

      Frank Siedler:

      Definitely! BlackBerry 10 is the most secure smartphone OS, it’s great to handle and it’s working very fluent. The gesture control is awesome, it’s intuitive and simple to use, and it’s very fast.
      I think, BlackBerry should work on the Android App system on BlackBerry 10. The Google Play Store and the Google Services. Then BlackBerry 10 would have everything, that users want.

        Bibhu:

        Instead relying on Google App store ,BB should encourage developers to develop apps which targets BB OS platform like what Google and Apple is doing. I love everything about BB except lack of apps.

    Joe Panettieri:

    Hi Walter, Cyn, Sandeep: I authored the article. Our team watches the comments area closely on ChannelE2E. We care about feedback such as yours.

    Gotta admit: I haven’t tracked BlackBerry all that closely the past few years. But I knew John Chen’s story back when he was running Sybase. And I’ve interviewed Thurber and McLeod multiple times over the past decade or so.

    I think the OS challenge is pretty straightforward. Chen and Thurber have got to get the device business back to break-even or profitability. It can’t be a multi-year journey. Real progress, it seems to me, has to surface this year. With that reality in mind I understand why BlackBerry would bet so heavily on Android.

    In some ways, BlackBerry’s own OSes remind me of the days of IBM OS/2 (mid-1990s), which many customers loved but CEO Lou Gerstner decided to deemphasize based of revenue, profit (actually, loss) and overall software trends.

    I truly believe Chen, Thurber and the BlackBerry team want to do what’s right for customers. But I also think they’re dealing with certain financial realities that may not be able to please all customers across all OSes. Just my two cents.

    We’re curious to see if BlackBerry connects with VARs, resellers and distributors across the IT channel.

    Thanks again for your readership.
    -jp

    Content Czar, ChannelE2E

      tore:

      BlackBerry needs to work on innovation eg Passport SE, they need to make BBM Channels also a webbase version so it’s very easy to sign up to gather traction as a secured e-commerce enterprise social messenger , the Qwerty is still very important today.

    Jimmy:

    BlackBerry fan here. Enjoyed the article and I’ll be checking out the rest of your site.

    Lee Blanchard:

    I agree with the others here. Blackberry has a wealth of innovative ideas to draw on like the recent Passport. It’s time to get away from the bland same old phones like Samsung and Apple.

    Lee Blanchard:

    The idea support BlackBerry Channels on the Web is an excellent one. It’s a going concern and seems to be growing exponentially.

    Lee Blanchard:

    Just one other thing to comment on here too. Very unusual but there seems to be a groundswell of new apps for BB10. I guess developers are tired of getting their ideas lost on Android and IOS.

    John Grant:

    If the FBI can get a company to hack an iphone for under $1 million, what does that tell you about iphone security especially enterprises using them?!

    BB10 devices are the most secure.
    Blackberry PRIV Android device is the most secure Android device.

    Joe Panettieri:

    Hey Folks,

    Just jumping in to clarify a few things for readers who aren’t familiar with BlackBerry platforms and offerings that are mentioned above…

    1. Passport SE: You can find product information here.
    2. BBM Channels: I don’t know the status of this service. I’ll check with BlackBerry to see if they’ve shared updates. Using BBM Channels, channel owners can push out custom content to subscribers. This is not to be confused with the “Channel” strategy (involving VARs and distributors) that our article covers above.

    -jp

    Michael:

    Great read. I’m glad to finally read a neutral article about BlackBerry. I’m still on the Q10 and I’m on the fence in upgrading to either the Classic or the Passport.

    One thing that surprises me is with the desktop going away from software to SaaS (Cloud-based software) why are app developers focussed on building apps instead of SaaS on devices as well? Updates are immediate on your mobile, it takes less room on your phone, and it is OS agnostic. Apps should be dying on mobiles as well, not flourishing…

    Erich Fluck:

    I enjoyed your article very much, thank you. I seriously hope that BB10 has a bright future as it is easy to use and very quick. Fingers crossed!

    King:

    Should BlackBerry solely go android then all BlackBerry 10 OS smartphones through an update must be powered by Android OS. No one should be left behind. There’s a prototype passport SE running Android.

      Chris:

      Hell no!!!

      Or at least let me the choice to stay on BB10.

    Michael:

    Same mistake every time . Too expansive for the market and not bundling with the BES Licenses.

    Robin:

    Dual sim card phones, (both real and virtual) exist. Why not a partitioned dual OS phone? BB OS10 on one side for business, and for those who use apps, Android on the other side, with personal phone number.

    Pete:

    Dual OS would be a differentiator. Android and Blackberry 10 capability that’s married to a passport type device that provides the keyboard as well as full touch-priv like-no slider. This is the best bet for a device that can sell volume. Marketing must also be very good.

    Nora Kernisant:

    I love my BB10 phones. Own the Classic and Leap, had the Z10 and Q10. Classic remains my fave form factor. I am now using the Priv. While I do enjoy it, I miss the iconic Classic/Bold form factor. I hope BlackBerry will bring that back with Blend, StoryMaker and OS10 swipe gestures. Hub is amazing.

    Jack:

    I challenge the notion that BlackBerry was “teetering on bankruptcy” when Chen came in. They had $3 Billion in the bank with zero debt. I think that has been the problem that no one is talking about. There is no way that they can be successful, no matter how good the product, until they can clear up misconceptions like this. I knew plenty of people in the fall of 2013 who wanted to try a BB10 device. But, the idea that “BlackBerry is going bankrupt” persuaded them not to. 2 1/2 years later, I am still running a BB10 device and loving it.

      Joe Panettieri:

      Hi Jack,

      I appreciate your note. Even with $3 billion in the bank in 2013, that represented only about 18 months cash on hand — had the company not made major changes to stop the bleeding. It’s like having a huge, seemingly endless savings account but being unemployed without cutting your expenses. At some point, your savings is gone… and you’re bankrupt. In this case, BlackBerry made deep, deep cuts to avoid falling off a true financial cliff.

      Best,
      -jp

        jack:

        Thanks Joe,
        They were in a tough spot and they are still in a tough spot. No doubt about it. I just don’t think that qualifies as “teetering on bankruptcy”.

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