BlackBerry is beginning their transition to profitability under John Chen’s leadership. The BlackBerry CEO has already said the company has “survived.”
When most look to BlackBerry’s revival, the focus is primarily on its hardware. “I’m stunned at what I’m seeing. Everybody is still focused on the hardware,” said Peter Misek, a venture partner at DN Capital in an interview with BNN.
Chen’s goal to double software revenue by the end of fiscal 2015, from $250 million to $500 million, is beginning to materialize. “It’s pretty exciting for them in that they are actually seeing traction among enterprise. As we talk to big CIOs, they are really showing up again,” said Misek.
BlackBerry hopes to garner increased revenue by switching up its BES subscription model. “It’s our plan to aggressively shift our software business from the perpetual license to a subscription base,” said Chen on BlackBerry’s most recent earnings call. Chen said the shift to subscriptions will yield lower revenue in the short term, but the subscription model will produce “more respectable revenue in future quarter.”
BlackBerry currently offers a free trial of BES 10, called EZ Pass, which is widely expected to expire on February 1, 2015 for 3.4 million subscribers. “On that day, roughly two to three times the number who they are currently charging will start to pay, hopefully. You could see software revenues more than double,” said Misek.
Chen expects to see at least 10 million join a BES solution in the next fiscal year. Software revenue decreased 12.5 percent or $8 million in the third quarter of fiscal 2014 to $56 million, compared to $64 million a year earlier, amounting to just 4.7 percent of overall revenue. Chen hopes the new changes will thwart continued decline.