Tuesday Tip: Capitalism Works!

Blackberry Going the Way of the Dinosaurs – Good Riddance

by David Gracey

Here’s the tip: don’t buy a Blackberry!

For over a decade Research in Motion, maker of the wildly popular Blackberry device dominated the market for business email and cell phones.  “Crackberry” became the term to describe the devices that began to keep folks tethered to the office.  The physical keyboard allowed people to give longer responses to emails.  The Blackberry was the industry standard representing high-quality, mobile, confidential business communications.

As the popularity of Blackberries increased in the early 2000’s, an increasing number of subscribers clamored for the popular devices.  Companies didn’t care that in order to support the devices, IT departments had to devote an increasingly larger number of resources to keeping the Blackberries running.  The design flaw in the Blackberry was that it required a dedicated server to “push” email from the corporate email server to the handhelds.  It was an additional and expensive extra link in the chain of communication.  Companies had to pay, not only for the Blackberry server but for expensive support contracts, software licenses and IT personnel for the care and feeding of the system.  If the server went down, email to the Blackberries stopped.

But competition began to find its footing by 2005 or so.  Microsoft developed an application called Active Sync which allowed Windows “smartphones” to synchronize directly with email servers, completely bypassing the expensive Blackberry infrastructure. Palm came out with the Treo and several other competitors came to market as well giving folks alternatives to the 800 pound gorilla.

And then came the Great Recession and Apple.

By the time the housing bubble of 2007 had turned into the financial crisis in 2008, businesses everywhere were reeling from a dramatic drop in economic activity the likes of which this generation had never seen.  RIM’s arrogance had it believe its market dominance would last forever.  The first version of Apple’s iPhone made a small splash.  Its incompatibility with corporate email only reinforced RIM’s inflated perception of itself.  But Apple and other manufacturers were committed to the corporate world and were improving their products.

With corporate America slashing jobs at an alarming rate, IT departments were some of the hardest hit.  Most companies thought their IT infrastructure was good enough to be able to “do more with less”, which was Microsoft’s tagline at the time.  Well, they got the “with less” part right and gutted IT headcount and budgets.  This left IT directors in the position of finding cheaper solutions which could still do the trick.  Targeting the Blackberry infrastructure was something IT departments had wanted to do for years but could not because the executives had grown accustomed to the RIM devices.

But as the iPhone and others gained in popularity, executives and business owners realized they could get all the functionality their Blackberry gave them, and more, for much less cost.  As cell contracts came up for renewal, Blackberry users traded in their phones for newer, sleeker, non-Blackberries en mass.

RIM has tried to reinvent itself and restructure.  Its latest attempt was to lay off about 20% of its workforce.  As long as the infrastructure to support Blackberries stays expensive and their products uninspiring, the company will continue to die.  Most folks in the IT industry are glad to see that day coming.

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David Gracey: Since its founding in 1998, David has grown Network 1 into a top-notch IT services company dedicated to delivering the best solutions for Atlanta’s small and mid-size businesses. His responsibilities include creating the vision and strategy for its growth and establishing the culture of Network 1.

Network 1 designs, builds and supports the IT you need to run your business more securely, productively and successfully. Whether you want to outsource all of your IT needs to a reliable, responsive, service-oriented company, or need to supplement the work of your internal IT staff, we will carefully evaluate where you are now, discuss where you want to go and implement and support a plan to get you there with as little interruption as possible.

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