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Cracks Emerge in RIM's Enterprise Castle [eWEEK](eWEEK Via Acquire Media NewsEdge) eWEEK News: Once super popular for consumers and businesspeople, the BlackBerry is losing out to smartphones such as Apple's iPhone and Google's Android handsets. Research In Motion has long been the king of enterprise mobility, but tiny cracks are beginning to show in the company's coveted business market. Enterprise device management software providers such as Good Technology and Mobile Iron are seizing the advantage against the company, which commands the bulk of smartphone installations in the workplace. Lets review the current smartphone environment, where RIM is seeing a softening. On June 16, the company said it earned $4.9 billion in revenue for the first quarter of fiscal 2012, down 12 percent from the previous quarter. Net income also declined, and RIM curbed earnings per share for fiscal 2012 to be between $5.25 and $6. Thats a marked decrease from its prior call for $7.50 EPS. RIM, which declined to participate in this story, attributed the shortfalls to its aging BlackBerry handset portfolio. Indeed, BlackBerry phones, once popular messaging devices for consumers and business workers, are losing out to smartphones such as Apple iPhones and Google Android handsets. These newer phones have big, bold touch screens, speedy processors and hundreds of thousands of applications from which to choose. The broad picture is no less bleak. Researcher Nielsen said in the June quarter that RIM's U.S. smartphone market share declined to 20 percent - almost half as much as Android's handset share and behind the 28 percent iPhone commanded. The numbers dorit lie, but a darker story may be emerging in RIM's enterprise business as firms dump BlackBerrys for - or complement them with - iPhones and Android phones. That's bad not only for RIM's BlackBerry sales, but for sales of its BlackBerry Enterprise Server software, which helps protect and manage the corporate BlackBerrys. Forrester Research analyst Michele Pelino said RIM's BlackBerry handset share is threatened by companies moving to a hybridized model of letting employees bring in their own devices. "They are entrenched in that enterprise environment and now that environment is going much more hybrid, with larger firms opening doors to other OSes and devices," Pelino said. Enter Fender Musical Instruments, which is offering a program to let 300 of its BlackBerry-using employees dump their companyissued devices to use their own iPhones or Androids. Fender pays 100 percent of the costs of its employees' BlackBerrys. However, it will pay workers who use their personal iPhone or Android handset a stipend equal to the data costs incurred by its corporate BlackBerrys. The optional program has been piloted by 40 workers. To date, 27 staffers have replaced their Fenderfronted BlackBerrys with their own iPhones, while 13 use their own Android phones. The personal units run the gamut of iPhone 3G, 3Gs, iPhone to Motorola Droids, HTC Evo 4Gs and other Droid choices. Jason Bredimus, vice president of global infrastructure for Fender, said the company set up the program to offer its knowledge workers more choice. Fender is still primarily a BlackBerry shop, but Bredimus said he expects to see more iPhones and Androids in the future. "Our philosophy in IT is that we don't want to be the party of no," Bredimus said. "We want to say yes to users but do so in a way that is responsible and protects Fender's assets." To that end, Good Technology is providing remote wipe and other enterprise management capabilities for the iPhones and Android gadgets. This is where RIM takes another hit. BlackBerry Enterprise Server is very important to RIM corporate sales. Good and other vendors - such as Sybase, Mobile Iron and Zenprise - are carving out a new ecosystem of device management to support those newer platforms. Jack Gold, founding analyst for Jack Gold Associates, summarized RIM's long-term problems: "If users get to pick their own devices, what will make them pick a BlackBerry? RIM needs to do something that will excite end users and get them to want a BlackBerry." Fortunately for RIM, the smartphone market has proven nothing if not diverse. Android just captured the U.S. lead from RIM a year ago. RIM could regain some lost share if it brings its so-called "superphones" to market. These devices will eschew the classic BlackBerry OS for RIM's QNX operating system, which currently powers the PlayBook RIM is calling the platform OS Next. Unfortunately, those superphones aren't coming until 2012. Gold expects that while RIM may continue to lose market share in the enterprise until those next-generation phones appear, the newer handsets will staunch some of the bleeding. "I don't think they will lose the enterprise as quickly or completely as some believe," Gold said. "I think they have time to recover, but if the OS Next devices are not a solid hit, there will be a continued slide in RIM's market share. So the next six to 12 months are critical for RIM." While BlackBerry phones face immediate threats from iPhone and Android, RIM's mettle to vie for the future of the corporate IT market is being severely tested in another subset tablet computers led by Apple's iPad. The iPad, which sold nearly 30 million units since its launch in April 2010, is becoming something of a household tablet in the enterprise. RIM's BlackBerry PlayBook is a pretty 7-inch slate. Unfortunately, RIM didn't launch the PlayBook until April 19 of this year ,and its sold only 500,000-plus units to date. Apple's iPad 2 sold 500,000 units on its March 2011 launch date. "The fact that it took so long to get the PlayBook to market is one of the challenges that RIM is dealing with," Forrester's Pelino said. That certainly jibes with what one of the nation's largest law firms, Proskauer Rose, told eWEEK. The firm issued iPad 2 slates to 500 of its 700 partners during April and May. The PlayBook was available at that time, but Proskauer had opted to go with the iPad months before, said Malcolm Collingwood, senior technology strategist for Proskauer. The firrris partners use the iPads to send and receive email, and to review attachments and other electronic documents. They also use the iPads to go over contracts with clients and participate in conference calls. Steve Kayman, a partner and chair of Proskauer's technology committee, said the firm mulled seeding its partners with laptops two years ago, but felt the technology world was evolving toward netbooks and tablets. So Proskauer let partners choose between a laptop or a desktop and an iPad. Most of the partners picked the desktop/iPad combo, he said. Proskauer is still primarily a BlackBerry shop for smartphones, with 600 out of 700 partners using one BlackBerry handset or another to communicate. The other 100 employees use iPhones. Proskauer pays for its partners' devices and data contracts and has tapped mobile device management software specialist Mobile Iron to help manage and secure its partners' iPhones and iPads. The firm uses BlackBerry Enterprise Server to manage its BlackBerry devices. While Collingwood said he doesn't find it onerous to operate Mobile Iron and BlackBerry Enterprise Server mobile device management suites, he acknowledged that Mobile Iron could support all of Proskauer's devices in the future. That could mean another hitfor RIM's BlackBerry Enterprise Server. Fender and Proskauer Rose are just two examples of corporations looking outside the RIM sphere for mobile devices. eWEEK contacted mobile device management software vendors Sybase and Zenprise, neither of which could - or would - provide a customer that dumped or complemented BlackBerry handsets and tablets with Android or iOS devices. Still, there are bound to be more Proskauers and Fenders out there. So RIM must double its efforts to retain its enterprise market lead. For more articles on this topic, go to eweek.com. eWEEK Senior Writer Clint Boulton can he reached at [email protected]. (c) 2011 Ziff Davis Enterprise Inc. |