Creative Destruction: Could RIM’s Loss be Apple’s Gain for UC?
This premise might seem like a bit of a stretch for our readers here at UCStrategies, but just bear with me for five minutes. We’re all seeing constant change in this space, and when it comes to disruption, these days, I don’t see how you can rule anything out. Just when you thought the UC world was starting to make sense, something entirely new comes in from left field.
My view is that you have to accept this as the new normal, and the harder you hang on to preconceived notions about what constitutes a “UC vendor” or a viable technology, the more challenging these disruptions will be to adapt to. In no particular order, just consider a few recent developments and trends as examples.
- Acme Packet getting acquired by Oracle for almost $2 billion – really, who saw that coming?
- WebRTC’s red-hot rise to now become the game-changer du jour
- The recent bout of management turnover at ShoreTel, perhaps an indication that it’s time to make money, and that offering the choice of premise or cloud-based solutions may not be catching on so fast
- In the video space, the current flurry of financial activity is helping validate the cloud-based model being pioneered by startups – namely Vidtel being acquired, and hefty funding rounds for Blue Jeans and Fuzebox
- The updates and overhauls of IP communications portfolios among the majors, with a pronounced shift to the cloud – most notably, Avaya’s IP Office 9.0 and the reinvention of Siemens Enterprise as Unify
These are high profile examples of change going on with familiar faces, but I now want you to consider a scenario with some less familiar faces – at least in the context of the UC landscape as currently constructed. Without going all Karl Marx on you, the term “creative destruction” comes to mind when thinking about the death watch going on with RIM these days. Being based in Canada, of course I hope they will somehow survive, and am actually optimistic they will avoid Nortel’s fate and find a way to reinvent themselves.
RIM isn’t really relevant for UC today, but they sure could have been if they had figured out a way to hold sway over a market they invented – secure, mobile data communication for business. Imagine if they had kept their mojo and fended off Android and Apple long enough for the UC market to take root. When they ruled the world, just like with Acme and Oracle, nobody saw these other forces coming, or viewed them as serious threats. Wrong.
As I’ve noted elsewhere on this portal, it’s incredible how quickly RIM has become a non-factor when vendors develop mobile integration for their UC platforms. All the vendors I talk to follow the same pattern – they come to market supporting Apple, and then Android will be added. Anything else on your roadmap, folks? Umm – no. End of story.
Turns out this is becoming really important for UC, as mobile support is pretty much every vendor’s top priority. This is another wave nobody saw coming fast enough to adapt, and sadly RIM has nothing to do with it. The momentum is all being driven by the insane adoption of Apple and Android devices and self-centered desires of employees to bring them into the workplace – and like magic, just expect them to work. Again, RIM could have been riding the crest of this wave, but they’ve never viewed themselves as a handset vendor, and MOMA-worthy design cred is not their forte. The market is just moving too quickly on the device front, and once this became a handset-driven phenomenon, RIM fell out of favor as the business gadget of choice pretty quickly.
RIM put a big exclamation point on that reality with last month’s massive smartphone inventory write-down and staff cuts. I’m not here to throw water on the company, as I think there is lots of sustainable value that will attract a buyer or a strategic partner. What is more interesting to me is how RIM seems to be a textbook case of the aforementioned creative destruction that results when a faster/better/cheaper alternative comes along to displace the leader, resulting in a huge transfer of wealth from the losers to the winners.
I’m not a geek, so I can’t deconstruct the fine points about why or how RIM’s handsets could not ultimately compete with the new players – who, interestingly enough do not come from the known pool of handset vendors. Of course, RIM didn’t either, but doesn’t that tell you something about how nothing is really safe in this business?
Anyhow, what I can share with you is some back story that showed just how disruptive RIM was back in the day, as well as a glimpse into their philosophy that to me was an early harbinger of things to come. As you may know, RIM was really a paging play long before smartphones came along. Back in the 1990’s, I ran a boutique marketing research practice, and one of my projects was to help Rogers (known then as Cantel) gauge market acceptance for this radical new pager device from a startup called RIM.
Turns out nobody knew what to do with it, so I conducted focus groups with early adopter paging customers. They had never seen anything like it before, but after playing around with it, they started to get the concept. The rest is history, but I can tell you I was there long before anyone had heard about RIM.
Fast forward to 2006, and RIM was riding very high. There really were no competitors on the horizon and it seemed they could do no wrong. I was invited to attend a breakfast event for the financial community where Jim Balsillie was the featured speaker, and he explained what made RIM so successful. He focused almost entirely on their network, which was largely lost on this audience, but not a surprise to me.
They thought they were going to hear about handsets, but he only spoke briefly about them. However, one message really stood out for me – which seemed to make sense for RIM at the time, but I believe sowed the seeds of their undoing. Back then, the BlackBerry did email and voice – that was about it. RIM was getting a lot of questions about why their handsets didn’t have cameras like all the other smart phones. His position was categorically clear – they had no intention of adding extras such as cameras or MP3 players – not only would this add cost and complexity, but it would dilute the experience they are trying to deliver.
Remember, back then, BlackBerry was almost exclusively a business tool with no consumer appeal. In fact, as I re-read my blog post – with photos – from his talk, I noted how he referred to the BlackBerry simply as a “presentation terminal.” Well, I think you’d agree with me that the end user experience has evolved a lot since then, and if this doesn’t foreshadow what was to come, then I’m in the wrong business. If this little window into RIM’s soul piques your interest or nostalgia, here’s my original post from February 2006.
Now let’s tie this up with one of the drivers of this creative destruction, Apple. Back in March 2012, I wrote a series of posts elsewhere, outlining some scenarios where Apple could become a major UC player. In the spirit of Apple’s nomenclature, I dubbed their platform iCollab, and given RIM’s current fortunes, that scenario seems even more plausible to me now. I’ve talked enough about RIM, so just consider a few snippets about Apple:
- Not only are many of RIM’s loyal supporters swapping out their BlackBerrys for other smartphones to use in the workplace, but the Playbook never got off the ground. There is little doubt today that the iPhone and iPad are the mobile tools of choice for business.
- The iPhone has probably peaked in terms of its functionality. Many Apple devotees have been underwhelmed with the latest releases, and really, how much more can it really do? In the post-Jobs era, Apple needs a hit product, but I don’t see it coming from here.
- If you believe we’re in the post-PC era – and certainly the post-PBX era – the next Holy Grail will be a mobile device that makes this a reality. We’re not there yet, and while the netbook looked like the answer for about six months, it sure won’t be the iPhone or the iPad in its current state. Someone is going to come up with the true mobile successor to the PC, and when that comes, all the handset players will be in trouble if an outsider does the job. That will surely set off the next wave of creative destruction. Of course, given their track record, you can’t rule out Apple especially with so much at stake.
- Apple has too much cash in the bank and Tim Cook needs to build his own legacy. They’ve colonized and reinvented pretty much every consumer market they’re drawn to, but are still just a handset vendor for the business market. That space is almost saturated, but their brand is so strong, and I’m certain if they wanted a bigger piece of the business market it’s there for the taking. No other vendor in telecom or UC has their cachet, and if that can resonate with IT, anything is possible.
I’m sure you can think of other facets that would play into them making a run here. My point is not to be exhaustive, and I’m sure full-on Apple followers can come up with lots of reasons why this would be a bad idea. However, when you step back and see where RIM is at right now and what Apple is missing, is it really such a stretch to put them together?
In my view, nothing is more important than a scalable, secure network for UC to have success, and nobody does that better than RIM. Apple needs growth markets, and with their devices pretty much being the standard now for business, all they’re missing is the network. Given the rise of cloud and virtualization, enterprises are increasingly finding themselves better off outsourcing network operations, and really, what could be a better combination than RIM’s network and Apple’s endpoints? I know this is where the walled garden pushback will start, and yes, that’s a legitimate concern.
That aside, if you look at my iCollab posts, I really don’t think it would be difficult for Apple to come up with a UC platform, especially once those other pieces are in place. If Apple really wanted to be a player in the business market, the price of admission to acquire RIM would be very manageable. I think it’s fair to say that a move like this paid off for Cisco with WebEx, Avaya with Radvision (Scopia), and Microsoft with Yammer. These are all cases where big vendors may have overpaid, but it was the best way to acquire missing pieces so they could move into new markets, so it can be done.
I’ve gone on long enough, and have probably raised as many question as answers. That’s actually by design, as I want to provoke new thinking, especially from outside the status quo. UC is still an anything-goes value proposition, and given the examples I cited at the top of this post, anything is possible. This means you have to be willing to look well beyond the usual suspects for innovation, and not be surprised if big moves happen in totally unexpected ways. Apple and RIM may be a total non-starter, but when you look at how the pieces line up, there are certainly ways to make this work, and stranger things have happened. What do you think?