Analysts: BlackBerry at risk of losing business customers

BlackBerry announced last week it was terminating plans to sell itself and that its chief executive, Thorsten Heins, was stepping down. The recent news could make BlackBerry a less stable IT provider for business customers, some analysts say.

BlackBerry had been searching for a buyer since September, and was considering selling to FairFax Holdings, its largest shareholder. Instead, BlackBerry announced, FairFax and others plan to invest $1 billion in the company and John Chen, appointed executive chair of BlackBerry’s board of directors, will serve as interim chief executive while the company searches for a more permanent candidate.

The news “adds a little more risk to the whole equation,” said Ken Dulaney, author of a Gartner report last month recommending BlackBerry’s business customers consider alternative platforms. “You don’t know what the new chairman is going to do—he’s a software person, and hasn’t to my knowledge had a lot of hardware experience.” Chen previously served as chief executive of Sybase, a data management company acquired by SAP in 2010.

“We see all these variables and continued bad news. It makes it really tough for [businesses] to stick with Blackberry. . .They have so many other business priorities, it’s not something they want to deal with,” Dulaney said.

BlackBerry reported revenue of $1.6 billion for the three-month period ending Aug. 31, a 49 percent drop from the previous quarter and a 45 percent drop from the same quarter last year. It declined to share the percentage of total revenue generated by business customers, but has installed 25,000 commercial and test servers for businesses worldwide, up from 19,000 in July.

“We remain steadfast in our mission to deliver the most secure and powerful mobile management solutions to our customers. In order to do this, we are actively transforming our enterprise business to focus on mobile enterprise services – across all devices,” Stephen Bates, who heads BlackBerry’s business offerings division, said in a statement to the Washington Post.

“[W]e are accelerating our efforts to transform our business. BlackBerry is looking towards the future, and we have significant financial strength for the long-haul.”

Had BlackBerry continued in its plans to be acquired, the outlook for businesses might have been different, Ovum analyst Jan Dawson said in an e-mail — “because they would have known that the acquirer was in it for the long haul, and that there was a good prospect for BlackBerry’s survival for some time to come.”

Instead, the $1 billion investment, expected to be completed over the next couple of weeks, provides funding for a short period, Dawson added.

But BlackBerry has long been “a company in transition, and in flux,” Forrester analyst Christian Kane said, adding that he didn’t think the changes necessarily suggest problems in the future. “I don’t think it’s something where BlackBerry goes away overnight, they have plenty of cash on hand and plenty of customers.”

Mohana Ravindranath covers IT and small business for the Washington Post and its weekly Capital Business publication. She joined the Washington Post after graduating from the University of Pennsylvania and has interned for Business Insider and the Philadelphia Inquirer. She is a native of Pittsburgh.
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