Businesses and other large organizations relying on BlackBerry devices should consider an alternative, given the company’s struggles and its recent embrace of a buyout offer, a Gartner report suggests.
BlackBerry last month said it would consider being acquired by its largest shareholder, Canadian firm Fairfax Financial Holdings, but is seeking alternative offers. New York-based private equity firm Cerberus Capital Management, has also expressed interest in the company, despite a recent drop in revenue.
BlackBerry recorded revenue of $1.6 billion this quarter, down 49 percent from the previous quarter and 45 percent from the same time last year, according to a report for investors. Losses were $965 million, compared to $84 million the previous quarter and $229 million a year ago.
“We are very disappointed with our operational and financial results this quarter and have announced a series of major changes to address the competitive hardware environment and our cost structure,” Thorston Heins, BlackBerry’s president and chief executive, said in a statement. But he noted growth in BlackBerry’s business-specific offering, which has 25,000 servers installed, up from 19,000 in July.
Blackberry estimated it would spend $400 million, pre-tax, cutting 4,500 positions by the first quarter of fiscal year 2015, according to a Securities and Exchange Commission filing this week. This would include employee termination benefits among other restructuring costs.
After last week’s news, Gartner analyst Ken Dulaney released a report titled “BlackBerry Announcements Require Enterprises to Take Action,” recommending business clients consider back-up communication options.
The string of announcements are “an unusually large amount of negative news for a key vendor, so it’s understandable that IT leaders would want to prepare for alternatives,” Dulaney wrote. Almost a quarter of businesses Gartner surveyed use BlackBerry.
Alternatives mentioned included transitioning to other devices, upgrading only a limited set of users to BlackBerry’s new offerings, and not activating BlackBerry software for non-BlackBerry devices until later. Dulaney recommended businesses revisit their relationship with BlackBerry over the next six months, by which time he predicted the company’s future would be clearer.
A BlackBerry spokesperson characterized the report as “purely speculative,” according a statement released to All Things D, a Wall Street Journal tech blog. “BlackBerry is restructuring and pursing strategic alternatives to increase its focus on its core enterprise business. We remain steadfast in our mission to deliver the most secure and powerful mobile management solutions and smartphones to our customers.”