BlackBerry is apparently exiting hardware design. While this is a good decision with respect to where the company is today, it reflects on a recurring bad decision that has wiped out once dominant companies like Palm, Netscape and Commodore, and cost CEOs at IBM and Microsoft their jobs. What I think is interesting is that the lesson I see was first published (as far as I can tell) by Sun Tzu in 512 BC. Yes, we are talking about a lesson that is older than the Bible.
That lesson is simply that when attacking a larger force, you want to disrupt their battle plans; when being attacked by a smaller force, you want to dictate the form the battle will take. Whether we are talking IBM, Microsoft, Apple or BlackBerry, when each won, they won by following this battle plan. When each lost, they largely forgot it.
Perhaps the first time I saw this lesson play out badly for IBM, the then dominant company, was with the mainframe. Now, IBM was making a number of mistakes at the time, but the biggest was to embrace the concept of distributed computing, referred to as client/server, as the new gold standard. That cratered mainframe sales rather than aggressively challenging the new model and adapting the mainframe to the new market requirements. Fortunately, the market didn’t completely eliminate the platform, and this platform, now called System Z, remains one of the most powerful revenue and profit engines for the firm. But IBM dropped from dominating the segment to being a far smaller player. It is interesting to note that it took around five years before the challenging platform was even close to meeting the promises the vendors that built it had been making. Those were five years that IBM could have used to update the mainframe and create a better defense.
Zune vs. Surface
Conversely, when Microsoft initially went after the iPod with PlaysForSure, it started properly trying to use the model it was expert at to challenge Apple. But Microsoft executed badly. So it created Zune, its version of the iPod, and attempted to compete with that product using Apple’s approach. That resulted in an even more costly failure. With Surface, Microsoft had two initial offerings: one similar to the iPad that was ARM based and one more similar to the PC platform it dominated. The iPad-like effort failed in market and Surface was surprisingly successful. Granted, the entire tablet segment has weakened, but it largely stopped iPad intrusions into the PC market and now Apple is attempting to build a Surface-like tablet with the iPad Pro. It isn’t particularly successful.
What is interesting is that in both Palm and Microsoft, there were efforts that could have prevented the iPhone’s success. An internal team at Palm came up with an iPhone-like product substantially before Apple did, but Palm management concluded there was no place in the market for a consumer-focused phone and it was killed. Had they been successful, it is very likely we would still see Palm today.
Microsoft, when it was creating the Zune, had a team arguing that Microsoft needed to skip an iPod device and jump to an iPhone-like device instead, once again years before the iPhone. Steve Ballmer personally overrode them, feeling strongly that they needed to chase the iPod. In the first case, the firm didn’t see what Steve Jobs saw -- that the smartphone was going to kill the iPod. In the second, to be successful against Apple, it needed to go where the market was clearly going first but didn’t.
For BlackBerry, instead of pushing back on the keyboard, which you could blind type on and which was far safer for those who are easily distracted (particularly kids), it tried to build an iPhone clone and effectively blessed the iPhone as a result. It could have defended with user safety, digital security, or even business-funded vs. individual-funded (these things aren’t cheap), but did none of the above, and that was not a winning strategy.
Embrace, Extend, Exterminate
Now there was a strategy that Microsoft developed that could actually work against a larger vendor. It was called Embrace, Extend, and Exterminate. This is what Apple did with Lotus 1-2-3 and very close to what Google did with Android against Apple, with the exception of the Exterminate step. Google is still working on that. But the Embrace step is critical. This means you do whatever it takes so that your product can seamlessly replace the other. For Microsoft, that meant allowing the Lotus 1-2-3 scripts and files to load in Office. For Android, it meant getting the same apps that Apple had to run on Android. Microsoft Office then showcased a more complete solution and this forced Lotus to respond with Symphony, which the market deemed inferior, and Lotus’ platform failed in market. Google embraced but never really extended and thus exists in line with Apple and hasn’t been able to extinguish the platform, however, its coming blend of Android and Chrome, coupled with Apple’s move to emulate Surface, could result in a devastating outcome for Apple. We’ll see.
Wrapping Up: Sun Tzu
The translated quote from Sun Tzu’s “The Art of War” I’m using is, “The art of using troops when ten to the enemies one; surround him and if in all respects unequal be capable of eluding him.” You don’t chase a smaller enemy and you don’t confront a more powerful one, yet those are the strategies more commonly used. Currently, BlackBerry’s far more competent strategy is to elude Apple and partner with Google. It would likely partner with Apple if it could. While late, this showcases the right approach, which is to pick the right strategy for the specific condition. BlackBerry is now playing from its new unique strengths, management and security, and using it to enable industry standard smartphone designs for targeted business markets. Current leadership gets it but they wouldn’t be in this position if past leadership had learned this lesson in a far more timely manner.
Use this event to consider that maybe Sun Tzu was pretty smart and well worth studying, or just consider that these are rules China has used very successfully. From time to time, you may want to remind your own executives of the lessons that BlackBerry and others learned the hard way so you don’t have to. Trust me, learning this stuff the hard way isn’t even close to being an enjoyable experience. Ask Ballmer (Microsoft ex-CEO).
I say this as I’m reading rumors that Apple is creating an Amazon Echo clone and I think it will be the world’s next Zune. Ironically, this would likely make Ballmer really happy because the ghost of Sun Tzu will stop slapping him around and start focusing on Tim Cook.
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+