John Chen agrees to steer BlackBerry survival strategy

CEO Thorsten Heins resigns from BlackBerry board as the ailing firm gets a $1bn cash injection from Fairfax Financial Holdings Ltd

CEO Thorsten Heins will resign from the board of BlackBerry as the ailing mobile device company receives a $1bn cash injection from Fairfax Financial Holdings Limited.

The company announced former Sybase chief John Chen will be the executive chair of BlackBerry’s board of directors. In a statement, Blackberry said John Chen would be responsible for the strategic direction, strategic relationships and organisational goals of BlackBerry.

Chen will also serve as interim chief executive while the company searches for a new chief executive officer.

Chen is currently a director of Wells Fargo & Company and The Walt Disney Company. He was responsible for building Sybase’s mobile strategy. Sybase sold enterprise relational databases, but its position in the market was eroded by stiff competition from Microsoft with SQL Server and Oracle. 

In a bid to re-invent itself, Sybase began focusing on mobile software, thanks to mobile database technology the company bought with the 1994 acquisition of rapid application development tools company PowerBuilder.

In 2000 Chen re-invented Sybase around a strategy called Unwired Enterprise. The strategy focused on delivering data to mobile devices in the field as well as traditional desktops. It is this technology that powers SAP mobile strategy, following the ERP supplier’s acquisition of Sybase in 2010

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BlackBerry has shown it is still capable of innovating with rival BES 10, as a rival to iOS and Android, but the new OS had failed to gain much traction despite devices such as the Z10, Q10 and new Z30 smartphones.

“Today’s announcement represents a significant vote of confidence in BlackBerry and its future by this group of pre-eminent, long-term investors,” said Barbara Stymiest, chair of BlackBerry’s board.

Chen said: “BlackBerry is an iconic brand with enormous potential – but it’s going to take time, discipline and tough decisions to reclaim our success. I look forward to leading BlackBerry in its turnaround and business model transformation for the benefit of all of its constituencies, including its customers, shareholders and employees.”

BlackBerry still needs to explain where its growth will come from, said Ovum chief telecoms analyst Jan Dawson.

“BlackBerry’s new investors seem to see its future in software, which means using BlackBerry servers as the core of a broader enterprise device management platform, but this generates very little revenue for the company today. Though it’s achieved some traction with enterprises upgrading their BlackBerry servers, it has failed to sell many BlackBerry 10 devices, and this looks unlikely to change. This ultimately harms the unique selling point of BlackBerry server products leaving the door open to replacement by rivals that are better able to support the more popular Apple and Android devices," he said.

“Fairfax’s investment will buy the company some time, which it badly needs, but the company needs a new strategy more than ever. If Fairfax had taken the company private, it could have kept that strategy to itself. But with BlackBerry remaining a public company, [they] need to start communicating that new strategy very soon to inspire confidence in a turnaround.”

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