Mobility News

BlackBerry: Does John Chen Mean A Software Tack?

Lisa Barry

Former CEO of Sybase, John Chen, was handed the reins of BlackBerry on Monday as former BlackBerry CEO, Thorsten Heins, bowed out. Where the traditional hardware company will steer next will be up to Chen, a widely respected and successful executive, historically focused on software.

"Changing out CEOs, I think it makes some sense," Gartner analyst Ken Dulaney told CRN. "John Chen is a bit puzzling because he's not a hardware guy. That may mean they are going to focus on making BlackBerry a software company."

Chen became COO of Sybase in 1997 before becoming CEO just one year later. At the time, Sybase was floundering as an enterprise database business, attempting to compete with Oracle and similar database software companies. Under Chen's leadership, the company integrated mobility and business analytics software into its lineup and continued to experience growth.

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In July of 2010, Sybase was sold for $5.8 billion to SAP with Chen stepping down from his Sybase post shortly after.

Other ventures seen on Chen's resume, according to a BlackBerry statement, include executive positions at a variety of computing and technology companies, including Siemens AG, Pyramid Technology and Burroughs. Currently, Chen serves as director of Wells Fargo and Co. and The Walt Disney Company.

President and primary analyst at J. Gold Associates Jack Gold said Chen's software background is not enough to forecast the direction he will take BlackBerry.

"He is a manager first and foremost," Gold said. Gold added BlackBerry is truly three separate businesses: hardware, services and a social business with its messenger service, BBM.

"[Chen] is an executive that can focus on all three of them," Gold said.

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"Another option is, maybe [BlackBerry] brought him in because they think he can break the company up and sell it," said Dulaney.

Selling BlackBerry in pieces has been an option the company had been exploring since August when the first offer from Fairfax Financial was put on the table to take the company private for $4.7 billion. Though hardware and software giants such as Cisco, Google, SAP and Lenovo were all rumored buyers of BlackBerry, or portions of it, none came to fruition.

Though splitting and selling the company may always be on the table, Dulaney said investors must have been promised something for the $1 billion investment through convertible debt financing.

Chen is expected to serve as BlackBerry's CEO on an interim basis, but his influence extends as he also has accepted the title of chairman of BlackBerry's board of directors.

In a statement, Chen recognized the challenge set in front of him: "I am pleased to join a company with as much potential as BlackBerry. BlackBerry is an iconic brand with enormous potential -- but it's going to take time, discipline and tough decisions to reclaim our success. I look forward to leading BlackBerry in its turnaround and business model transformation for the benefit of all of its constituencies, including its customers, shareholders and employees."

"Any time you start losing customers, and [BlackBerry] has lost a lot of device users, it's really hard to get them back," Gold said. "He has an uphill road to climb at BlackBerry."

Rick Jordan, director of Sales and Strategic Alliances at Tenet Computer Group, a Toronto-based solution provider and BlackBerry partner, has pulled for BlackBerry's turnaround since it began slipping. He said BlackBerry is an example of a company with plenty to offer, but it lacks the necessary leadership to efficiently get its products to market.

"Apple at one point was on the verge of going bankrupt, and Steve Jobs came in and had a vision," Jordan said. "I think what it comes down to is you have to have someone with a vision."

As a partner, Jordan believes the company needs to be focusing on pushing the entire ecosystem, not just promoting hardware.

"It's not so much about getting people to get the devices, but it's about going beyond devices," Jordan said. Jordan added the BES platform is one example of a stellar product being adopted too slowly due to the company’s inability to effectively bring it to market.

"It's exciting times at BlackBerry," Jordan said. "At the end of the day, I hope they can weather the storm."


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