BlackBerry Ltd , has been in the news over the last couple of weeks as analysts continue guessing about where the firm is headed. BlackBerry made news again yesterday after it was reported that the firm has hired a Cisco executive to come on board as the new head of global sales.
Reuters reported that BlackBerry has hired Carl Wiese as its new head of global sales. Wiese had been with Cisco Systems for the last 10 years. While at Cisco, Wiese headed the Cisco’s advanced technology sales unit and he later worked in the sales of Cisco’s collaboration-products. In addition to Cisco Systems, Wiese has worked at Avaya, Apple Inc., Texas Instruments and Lucent. He will take charge of BlackBerry’s marketing and its global sales plans.
Is BlackBerry Embracing its Software Destiny?
BlackBerry , has mostly been making money from the sale, licensing, and use of its software over the last couple years. In fact, CEO John Chen’s turnaround plan for the firm includes raising software revenue to $500m by the end of fiscal 2016.
BlackBerry has maintained that it is still fully in the business of making phones. In June, it said that its hardware business is vital for its software business despite the fact that device sales reached their lowest point since 2007. CEO John Chen was quoted in the earnings call saying, “I think there’s still a shot at making money in the hardware business”.
Despite Chen’s optimism, it is glaring that the software side of the business is the only lifeline keeping the firm alive. If BlackBerry were to be a sole hardware business, it would most likely have gone the way of Nokia Corporation, Sagem, or Motorola. A salient point in the firm’s first quarter (Q1 2016) results confirms the importance of software to its business. Revenue from smartphone sales dropped to $263M from $379M from the previous year. In contrast, the income from software increased by 153% to $137M.
BlackBerry , can hang on to the relics of its past for as long as its wants. Its emotional ties with the iconic BlackBerry phone might also delay its transition to become a full software firm. Yet, BlackBerry is only postponing its evil days even if it succeeds in launching in rumored Android phones.
The hiring of a Cisco veteran suggests that BlackBerry is already reading the signs that its days as a hardware firm are over. Hiring Wiese is strategic and CEO John Chen says, “Carl has extensive experience in enterprise software and emerging technology solutions, which will be instrumental as BlackBerry moves toward stabilizing revenue”.
The fact that Wiese with his 12-year experience has been called in to replace John Sims who has been on the job for 18 months suggest that BlackBerry is now taking software seriously.