BlackBerrys were once hot, now they're not. Now what?

BlackBerrys were once hot, now they’re not. Now what?
Image Credit: Kārlis Dambrāns

The best product management job to have roughly 5 years ago would have been to work at Blackberry – the maker of the most popular mobile phones. Back in the day, no matter where you went, you would always see people typing on those little Blackberry keyboards or using their little Blackberry trackballs. However, a lot has happened in the past 5 years – both the iPhone and Android arrived on the scene and Blackberry has fallen on hard times. Can this brand be saved?

How Did Blackberry Fall Down?

The source of BlackBerry’s hard times is pretty easy to point out. Back in the day, the only smart phone that was widely available was the BlackBerry. They did a nice job of creating their own messaging system and with every release, their phones got just a bit better. However, then Apple and Samsung arrived at the party and the BlackBerry product managers didn’t update their product development definition.

What Apple (and Samsung) did was to create a stylish phone that everyone wanted. They further supported their products by creating a thriving app store for their phone and then they encouraged app developers to create software that would run only on their phones. People started buying these other phones not just because of what the phones could do, but also because of the library of software that purchasing the phone would provide them with access to.

The impact of all of this competition was market share loss. BlackBerry slid from having a 50% market share about 5 years ago down to roughly 1.9% right now. Clearly, this isn’t going to look good on anyone’s product manager resume. Their CEO has been taking steps to try to fix things by reducing the company’s operating expenses by 30%. Additionally, the company is trying to woo back their key government and large corporation customers.

Can Blackberry Get Up Again?

The product managers at BlackBerry have a critical task ahead of them: saving their brand. In order to successfully do this, they are going to have to create an app store that is as large and as valuable as both Apple and Google’s Android have done. They’ve already taken the first steps in making this happen by starting to open up access to their operating system. They are reaching out to companies like IBM and VMWare to see if they can interest them in creating mobile-device management software that will work with BlackBerry devices.

One of the reasons that BlackBerry is in such dire straits is because with their loss of market share, their corporate revenues have also slid. The BlackBerry product managers are now looking for ways to replace their lost revenue streams. They are investigating finding ways to harness the 85 million users of the BlackBerry Messaging service (BBM). The thinking is that if they allow advertisers to gain access to this communication stream, then the advertisers could set up their own channels that would attract subscribers.

Finally, as the product managers took a look at BlackBerry’s business model they made an interesting discovery. It turns out that it was costing the company more to manufacture its mobile phones than they were making from them. This caused the product managers to take steps to get out of the phone manufacturing business. BlackBerry has now outsourced all of its phone manufacturing to Foxconn Technology Group. This should allow BlackBerry to focus on the things that will allow them to save the company.

What Does All Of This Mean For You?

Once upon a time, Blackberry was the king of the cell phone hill. However, as with all such things in life, things changed. Now in a world of iPhones and Android devices the Blackberry brand seems to be just hanging on. Does the product manager job description for the Blackberry product managers say anything about saving this brand?

The answer to that question is – maybe. Blackberry got themselves into this hole by guarding their system too closely. They didn’t open the system and allow other firms to build on top of it. This is now changing. They are allowing outside firms to create applications that will run on the Blackberry OS and they are releasing more models of phones.

The key here is time. The Blackberry product managers are going to have to move quickly. Their competition is not going to be standing still and so they will have to innovate faster. This can be done, but ultimately everything now rests in the hands of the Blackberry product managers…

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think that the Blackberry store needs to have more apps or simply better apps?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

Ah, product timelines. This is arguably one of the most visible and one of the most difficult things that a product manager is called on to create in order to communicate your product development definition. It turns out that creating a timeline is not really all that hard to do. However, creating a timeline that is both accurate and useful to other people is quite hard to do. I recently had to help a startup company create their very first product timeline and it reminded me just how tricky this task can be…

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Can Product Managers Innovate Too Fast?

by drjim on March 16, 2015

Is it possible to move into the cloud too fast?

Is it possible to move into the cloud too fast?
Image Credit: Raffaele Camardella

Over in the world of IT products, there is a lot of talk going on about “cloud computing”. In a nutshell, what this means is that companies stop buying computers to run their programs on and instead pay other companies to buy computers and then turn their software over to them so that they take care of all of the details of keeping the software up and running. The economics are pretty nice and so a lot of product managers are switching to this business model. However, is it possible to switch too soon? Over at SAP the product managers are probably wondering about this question right about now…

Why SAP Switched To The Cloud

Just in case you didn’t know it, in the world of business management software packages, SAP is the king of the hill. They currently own an amazing 24% of the market. Their nearest competitor is Oracle who only owns 12%. Last year SAP brought in US$6.2B in revenue in this segment. Not a bad business to be in and what a great thing to be able to put on your product manager resume.

However, there is trouble on the horizon. It turns out that the fastest growing companies in this market are all “cloud based”. In other words, their software runs on computers that are hosted in a data center somewhere and their customers access the software over the Internet. This differs from SAP’s business model in which they sell software to their customers who then run it on their computers in their data centers. The upstarts in the market are growing at an astounding 86%! They currently only have a tiny part of the market, but the writing is clearly on the wall.

What SAP has done is to update their product development definition and try to create two versions of their product. One does what it has always done – it’s software that comes on discs that you load on your computers. The other is “cloud based” and you don’t buy it, rather you subscribe to it and it runs on servers that are located “somewhere else”.

Issues With The Cloud For SAP

As all product managers know, a change this big comes with its own special set of problems. The first was that the SAP software was never originally designed to run in the cloud. This means that they’ve had to rewrite a big part of it – especially the database that sits at the heart of the product. Now they have two different versions of the same product that the product managers will have to manage.

As you can well imagine, the arrival of a brand new product has caused issues in the SAP sales team. They were used to getting sales credit for making a very big sale – the company gets paid a lot of money when a customer buys the product upfront to install on their servers. The cloud version does not bring in as much money upfront, instead the revenue comes in month-by-month. The SAP sales teams had been motivated to sell the software and not the service. The SAP product managers are now saying that they have corrected this problem, but it can be very difficult for a leopard to change its stripes…

Finally, you can imagine how confusing this is for SAP customers. They are interested in the cloud, but not all customers are willing to move into the cloud right now. Some customers are saying that if they have to consider switching to using a cloud based version of this software, they’ll use it as an opportunity to reevaluate their vendors. The SAP product managers certainly don’t what this! Also, customers who stick with the “old” way of doing things are concerned that SAP may no longer pay as much attention to them. It looks like the SAP product managers have a real communications task ahead of them.

What All Of This Means For You

As product managers we realize that change happens — it’s almost a part of our product manager job description. The way that our product is today is not the way that it will be tomorrow. Over at SAP, the product managers are dealing with this very issue – their product has to move into “the cloud” but their customers may not be ready.

The real growth in the business management market is coming from companies that are already in the cloud. What this means for SAP is that they now have to move there. They’ve created two version of their product: an “old” one and a “cloud” one. They need to get how they pay their sales teams worked out so that both products will be equally offered. They also have to make customers happy so that they feel like they are being supported and they don’t start looking at other vendors.

The good news for the SAP product managers is that they are probably doing the right thing. Now is the time to be looking at how they can move their existing product into the cloud. However, this kind of radical product transformation does not come easy. The SAP product managers will have to manage both their internal teams as well as their customer’s expectations.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think SAP should continue to sell two products or should they drop one?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

The best product management job to have roughly 5 years ago would have been to work at Blackberry – the maker of the most popular mobile phones. Back in the day, no matter where you went, you would always see people typing on those little Blackberry keyboards or using their little Blackberry trackballs. However, a lot has happened in the past 5 years – both the iPhone and Android arrived on the scene and Blackberry has fallen on hard times. Can this brand be saved?

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When Apps Go Bad: What We Can Learn From Wendy’s Mistake

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