BlackBerry Software Now More Important Than Hardware to Company Future

In 2015 there are two BlackBerrys.

There’s the one most people know; the hapless target of ribs about how it lost massive amounts of market share in the global smartphone race, and in the process became approximately as cool as dad jeans.

That’s the one U.S. President Barack Obama joked about on the Jimmy Kimmel show in March.

Then there’s the other BlackBerry, the one most casual observers don’t know.

The other BlackBerry is pursuing opportunities in the the Mobile device management/Enterprise mobility management space (MDM/EMM), in the Internet of Things space, where it intends to use its famous encryption to secure the billions of connected devices coming online, and in things like connected cars, where its QNX Software is the platform powering the infotainment systems in Mercedes Benz, Honda, BMW, Toyota, Chrysler, General Motors, Hyundai, vehicles.

Take the two BlackBerrys as a whole, and its clear that the sum of the parts is fast becoming a software company, moving away from the belt-clip on your Dockers cliche that has dogged it since the release of the iPhone.

The latest bit of evidence to this came on Friday, when the company announced an undisclosed amount of layoffs in the hardware portion of its business.

The company said it had “made the decision to consolidate (the) device software, hardware and applications business, impacting a number of employees around the world.” BlackBerry had 6,225 full-time employees as of February, 2015, down from a peak of about 20,000 just a few years ago.

CEO John Chen has been clear about moving the company to its strengths which, increasingly, don’t seem to be in making and selling devices. Two of his first moves as boss were to outsource the production of phones to Taiwanese electronics manufacturer Foxconn and to make its popular messaging service, BBM, cross-platform, a move that the company always resisted lest it impact hardware sales.

The BlackBerry ship stabilized under Chen, and the company says it is now looking at what’s next.

“As the company moves into its next stage of the turnaround, our intention is to reallocate resources in ways that will best enable us to capitalize on growth opportunities while driving toward sustainable profitability across all facets of our business,” BlackBerry said in a statement to Agence France-Presse on Saturday. “At the same time, we must grow software and licensing revenues.”

Share of BlackBerry on the TSX closed Friday up 2.7% to $12.88.