RIM dooms itself with IT-centric strategy

I think we can officially start preparing to say, "RIP, RIM."

In a world driven by consumerization one company stands alone against the wave of employees who are bringing their iPhones and Android phones to work. That company is RIM , who just announced plans to abandon their consumer efforts and focus on the enterprise. We know this will work because it worked so swimmingly for Microsoft. I think we can officially start preparing to say, "RIP, RIM."

I think if you are going to fall back on an IT-focused strategy, which is what RIM just announced, you have to focus on what IT wants and that isn't a phone that the users don't like. IT doesn't do phones anymore, so a return to an IT-based strategy will only speed RIM's decline. An IT-focused strategy would need to lose the phones and might be a service or product that IT needs to implement to secure and manage the user experience on the phones users choose, ensuring these devices and users are secure. However, IT just doesn't have the power to drive user technology anymore. They are losing it on PCs and most never really had it on phones.

Let's explore RIM's catastrophic strategic mistake.

Apple's Road to Glory

The most successful single cell phone company, particularly now that Google has had to disclose how little they actually make off of Android, is Apple. Apple became successful through a strategy of focusing exclusively on the user and they currently are the favorite IT platform for phones. Roughly a third of the large companies I spoke with at a recent EMC event said they were actively blocking Android.

Microsoft's Failed Attempts

Prior to Windows Phone 7, Microsoft had instituted an IT-focused strategy—with resources that dwarf RIM's and a reach through both multi-national cell phone makers and PC vendors—and got creamed in a market increasingly powered by user driven products like the iPhone.

The overall lesson is that if the users wanted it, the device came into the enterprise. And if they didn't want the device no amount of enterprise focus had any material effect on sales. Now Microsoft did make one huge mistake when they moved to Windows Phone 7; they abandoned virtually all of their enterprise management features. Those features could have been way to gain some unique advocacy because they haven't done that well on a consumer pure-play largely because buyers have already chosen another platform and don't have a strong reason to switch. IT support, better security and management might have created an IT advocacy which, on top of a consumer-oriented marketing plan, made them far more successful.

Consumerization: What's Not to Get

It amazes me that so many companies just don't get this consumerization trend. Recently I met with Citrix and they articulated an IT centric strategy as a response to OnLive, a consumer sourced company, entering their space. Consumerization, which is the mega trend that is currently driving the personal technology market, began as employee-driven technology decisions and it is quickly morphing into BYOD (Bring Your Own Device) strategies. While this is moving fairly slowly with PCs, it is on fire with smartphones—which represent 50 percent of phone sales today—and tablets.

For instance none of the business-focused tablet products have sold very well, but iPads are rolling into even secure segments like healthcare as if they are surfing on a tsunami. If you can't get the interest of the consumer on a consumerization trend line then you're screwed and IT just is no longer in a position to fix that.

RIM Must Evolve or RIP

Falling back to something you know is a common strategy once bloodied and losing. However, under a market change where what you know is no longer in line with real world conditions, it is also suicidal. The world that created Novell is gone and so is Novell, the world that created Palm is gone and so is Palm, and the world that created RIM is gone and if RIM doesn't recreate itself for the new world it will be gone as well. This can be accomplished because the world that created Apple is gone, and Apple was recreated for the new world. That isn't entirely right; Apple drove the change and changed itself to be the most successful company in it.

In the end, if you are trying to survive, follow Apple example (which doesn't mean copy Apple). Rather, try to go back into the past. Time travel doesn't work and no matter how much we'd like it to be otherwise, going back to our past life after the world has changed doesn't work either.

Here is an idea: Find a way to make physical controls (like phone keyboards) trendy again or find another way to drive the world in a direction that favors RIM in product design. But don't go back to being IT-centric. That boat sailed long ago and it's not coming back.

Rob is president and principal analyst of the Enderle Group. Previously, he was the Senior Research Fellow for Forrester Research and the Giga Information Group. Prior to that he worked for IBM and held positions in Internal Audit, Competitive Analysis, Marketing, Finance, and Security. Currently, Rob writes on emerging technology, security, and Linux for a wide variety of publications and appears on national news TV shows that include CNBC, FOX, Bloomberg and NPR.

Read more about it organization in CIO's IT Organization Drilldown.

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