Bankers Face BlackBerry Dilemma On Software Upgrade

 

©Reuters
Bankers are considering whether to break their longstanding love affair with their BlackBerrys as big businesses face the need to move to the latest version of the tech group’s core enterprise software.
BlackBerry is offering free upgrades to persuade banking clients that it is worth the move even as some still worry about the future of a Canadian group that once held a special place in the pockets of many in financial services.

The BlackBerry Enterprise Services 12 software, which launched last month, is crucial to the future of the company, according to Nick McQuire, analyst at CCS Insight. It will allow company IT departments to manage older BlackBerry devices as well as rival devices using software from Apple and Google.

Bankers were once inseparable from their BlackBerry devices but in recent years have migrated away from sole BlackBerry use and added smartphones and tablets from rival companies and some have abandoned BlackBerry devices altogether.
“If BlackBerry doesn’t stop the dripping away of business, it will become a [relic of a] forgotten era,” says Nick Russell, principal adviser in KPMG’s CIO Advisory team.
Mobile operators say that they were asked by corporate customers about other options ahead of last month’s upgrade, which is being offered for free until next year under BlackBerry’s “EZ Pass” offer. However, BlackBerry will soon start charging for the service, which means that it needs to be sure that its customers are willing to follow.
Ronan Dunne, Telefonica’s UK chief, says that concerns over the longevity of BlackBerry were causing corporate customers to reconsider their IT strategies.
If BlackBerry doesn’t stop the dripping away of business, it will become a [relic of a] forgotten era
– Nick Russell, KPMG

“Most of the conversations are ‘what are the alternatives’. If they don’t have a line of sight for the sustainability of BlackBerry, it’s hard to see too many will continue to upgrade . . . if they don’t know what the road map is.”
Analysts say that the BES12 upgrade is a return to Blackberry’s business roots after a previous version tried largely unsuccessfully to take on the consumer market dominated by brands such as Apple. The BES12 upgrade is designed to unify two existing BES platforms.
John Sims, president of global enterprise services at BlackBerry, says that for regulated industry customers, such as those in financial services, the cross-platform BES12 was more than a small update — “it’s a major step forward in maximising and safeguarding their mobile environment”.

Turnround plans

BlackBerry stakes out business customer

John Chen, chief executive officer of BlackBerry Ltd., speaks during the OASIS: The Montgomery Summit in Santa Monica, California, U.S., on Thursday, March 6, 2014. Chen has surprised skeptics and pleased investors by cutting costs and fueling a 56 percent surge in the smartphone maker’s stock. Photographer: Patrick T. Fallon/Bloomberg *** Local Caption *** John Chen
John Chen was grounded by a typhoon in Hong Kong but he laughs when asked whether BlackBerry is facing similar storms. “It’s still 80:20,” BlackBerry’s chief executive says about his chances of turning around the smartphone company. (In March he rated his chances at just 50:50) “I am actually feeling better than that now but I never use 100:0 as that would jinx us. But we are definitely out of danger.”

He says: “This very real security threat is why enterprises choose and trust BlackBerry. We have the unique combination of meeting any mobile deployment model — whether it’s bring your own device or corporate-owned, personally enabled — while never sacrificing the productivity or security needs of our customers.”
KPMG’s Mr Russell, who helps advise banks on their workplace IT strategy, says that BlackBerry has come under pressure from a general “consumerisation of IT”. Companies are now looking at using different IT tools for different employees: “In the past everyone might have got a BlackBerry [ . . .] Now it’s a deeper conversation about what’s the right device for each user. ”
Some bankers are pushing back as BlackBerry urges them to upgrade to the latest software amid concerns. about the company’s long-term health. Its share of consumer markets has fallen below 1 per cent in key European countries according to researchers Kantar.
“Everyone is being somewhat cautious as to how to approach BlackBerry,” says a managing director at a large bank. “No one wants to make a long-term commitment to upgrading IT platforms if there is a residual risk as to whether that partner is going to be around for a long time.”
Mr Dunne says that BlackBerry was also hampered by a lack of popular consumer devices. Companies with huge consumer businesses such as Samsung and Apple are rapidly gaining business customers. Both are benefiting from the “bring your own device” strategies that allow many workers to use their personal phones for work.

Dispatches from the tech world: FT experts in San Francisco, London and Taipei upload their views
BlackBerry chief executive John Chen has been applauded by investors for his work in turning around the ailing Canadian device maker since becoming Blackberry’s chief executive last year. He has cut costs, and set out a clearer strategy of wooing core users by playing up BlackBerry’s security advantages.
New devices have included the square-shaped Passport, as well as a return to older styles with the so-called BlackBerry Classic. “The transformation of BlackBerry is well under way,” says Mr Sims. “We are on track to be cash flow break even by the end of the fiscal year. The positive support we’re seeing from our enterprise customers is helping us on this path.”
He says that more than 5m BES client access licences have been registered since the EZ Pass migration programme launched in March. “More than 30 per cent of these licences have been traded in from competitors’ platforms.”
There are signs that the group has been recovering ground with its core corporate client base. According to IDC, BlackBerry improved market share in the commercial segment in the last couple of quarters after falling rapidly to a low of 1.7 per cent in the first quarter
And some bankers say they still favoured the BlackBerry keypad for writing emails, which constitutes much of their use. A managing director at a large US bank says: “The reason we live on our BlackBerrys is not because it’s the best device but because we’re used to it and because it has a decent keyboard you can type on.”

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