As the year closes it is difficult to look back on the last 12 months in the Canadian IT sector with anything but pangs of disappointment.
The year began with hope the country’s biggest IT company – then called Research In Motion – would burst out from the doldrums with a new line of handsets and new subscribers.
It ended with a new name, a new CEO, another new strategy and another wave of red ink.
The year began the hope the country’s wireless industry was robust enough to support a fourth new carrier — Eastlink’s long-awaited LTE service in the Maritimes – and that the dominance of the Big Three was about to end.
It ended with the disappearance of Public Mobile, the threatened disappearance of Mobilicity, questions about the intention of Wind Mobile’s biggest investor and the prospect of the continued dominance of the Big Three.
The year began with the Harper government expecting the upcoming 700 MHz spectrum auction would nourish new wireless carriers, including Verizon Communications.
It ended with Ottawa facing the prospect that a lucrative free-for-all in the auction – which starts Jan. 14 – won’t happen because Verizon, Public Mobile and Mobilicity won’t be there, so it will have to interfere in the market to ensure consumers aren’t abused by the Big Three.
The year began with no special hopes about online security – everyone knew malware creators would continue to find new holes into the enterprise and the war against them would not be easy.
It ended with the continued revelations from former NSA contractor Edward Snowden suggesting that the Canadian, U.S. and British governments were just as much to be feared as organized online criminals in Russia and China.
On the other hand it began with joy for a group of former Nortel Network executives cleared of criminal charges in the collapse of the company.
There were other stories – the continued development of software defined networking and network virtualization, still in embryonic stages for enterprises; Microsoft buying Nokia’s handset business; companies dancing with big data; the emergence of Apple’s iPad Mini; the march of BYOD and cloud computing: Cisco Systems Inc.’s promise to make Canada one of the company’s top five R&D centres.
But in my opinion BlackBerry, wireless and security dominated 2013 in this country, and will continue to do so in 2014.
We’ve packaged a number of stories that will look back at some of the more significant events month-by month for the year.
But to start, some analysis:
Where did it go wrong? When January started the company then known as RIM was undoubtedly in trouble – it’s new BB10 operating system and handsets were months late, and impatient customers were switching to Apple iPhone or Android handsets.
In truth, when CEO Thorsten Heins finally showed off the Z10 a number of industry and financial analysts warned it was too late. And instead of an international blitz the handset was launched slowly in several countries. The Q10, with a physical keyboard, came out later.
There was a short burst of news on good sales that turned out to be short-lived. It didn’t talk long for the finger-pointing to begin – the handsets were unremarkable compared to the iPhone and Samsung’s Galaxy III series, the interface didn’t have pizzazz, the marketing campaign was confusing, enterprises should have been targeted more sharply, the Q-series should have been introduced first because most BlackBerry subscribers use the physical keyboard models, and, ultimately, it was too late.
Perhaps the answer is “all of the above,” although I’m not sure launching the Q10 first would have made a difference. The fact is there are lots of executives who are keen on a large screen device and BlackBerry [TSX: BB] had to fire their imagination.
Here’s another fact: the Q10 has been on sale in the U.S. and Canada for several months. Sales aren’t spectacular. Where are the executives desperate to swap their old BlackBerrys for new ones? (Answer: Waiting for their IT departments to approve the new operating system and BES 10?)
One financial analyst predicted that we’d know in September if BB10 was a success. He was right. That month the company reported losing almost $1 billion, most of it unsold inventory that was written off.
We know the rest – the failed attempt by Fairfax Financial to lead a consortium to buy the company and take it private, the move instead to inject a billion or so to keep things going, Heins’ departure, new interim CEO and chairman John Chen taking over, an exit from the handset design business.
What will 2014 bring? One thing already announced: Layoffs. Forty per cent of the employees will be gone. Chen says he doesn’t want to go beyond that. We’ll see.
Interestingly, BlackBerry’s future is in some ways tied to the other big news of the year, security. The company wants to impress upon executives that it has superior security to the iPhone and Samsung devices with its Knox features. Ironically, U.S. security agencies want to quietly (at least until Snowden started blabbing) show the administration nothing is beyond their grasp.
Since 911, we’ve been told, security trumps everything in the U.S. If so, then despite the public grumblings of some in Congress over the activities of the agencies BlackBerry’s better security is meaningless to IT departments.
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