Repairing a broken RIM

RIM has announced that Jim Balsillie and Mike Lazairidis have resigned their position as co-CEO and co-Chairman, and that RIM’s board of directors unanimously named former chief operating officer Thorsten Heins as president and CEO. Barbara Stymiest, CEO of the Toronto Stock Exchange will become independent board chair.

Heins already faces a number of significant challenges. Rim continues to struggle against rivals, especially in the US market. Product launches have been flawed, and the roadmap forward is unclear. Heins himself is seen as a fresh set of hands to run the business, but is not widely viewed as the visionary leader that RIM needs to reset the bar a failing brand.

If Heins is to capitalize on the opportunity, and for RIM to have a genuine chance at regaining momentum, his first step will be to stabilize initiatives already underway and prevent any short term missteps. It will also be critical that Heins quickly brings serious management and creative talent to the table – quelling some of the fire sale rumors and giving shareholders confidence in a long term strategy.

Read more in these articles:

WSJ

Engadget

InfoWorld

The HP Way, Albeit Sideways

Anyone authoring a perspective on the topic of Meg Whitman’s appointment as CEO of HP is faced with a dilemma: observe the obvious wins and losses of her career and repeat what has been said hundreds (if not thousands) of times, speculate wildly about what she will mean to HP’s direction, value and viability, or explore an alternative viewpoint at the risk of being mocked by a fickle and less than patient community of analysts and readers hungry for the next corporate misstep.

Gabe Cole, who leads the Telwares IT Transformation Practice, addressed all three angles when he stated “A colleague put it best when he said HP is a tremendously tormented company. Fundamentally, there is conflict between high volume lines that provide short-term financial boosts (such as printers, desktops, notebooks, etc.), and focusing on more valuable enterprise and services plays. Both of the previous CEOs tried to break that cycle and failed as a result of different personal “flaws”…Hurd violated board standards and Apotheker was aloof and failed to build a team. It is safe to say that neither won the favor of the board. This is likely the endgame for HP.”

HP is heavily woven into the computing fabric of leading organizations, and has been driving advances in consumer PC, storage and cloud computing markets for years. Through their announced acquisition of Autonomy, economics aside, we know they directionally understand the services market going forward and the value of a big data play in staying competitive with rivals. This is not a business that will unwind overnight. That said, large enterprises are increasingly risk-averse and looking to source their next-generation network and computing strategies with a primary partner – the public soap opera that is HP over the past several years, along with a 49% drop in stock price, will not bolster enterprise confidence that HP is the partner of choice.

“Meg Whitman and Ray Lane must take decisive action in the first 90 days to shake up the board and management if HP is to survive as an independent company. Incremental smoothing will no longer suffice as HP needs to redefine and focus on its corporate soul which somehow it lost along the way” added Cole.

To that end, communications to both employees and the public has been challenging for HP and has played a major role in the turbulence related to the organization. It’s been a disastrous combination of messaging from leadership to customers and employees in stark contrast to very public actions. Customers are left to discern what the truth is concerning strategic intent, and for employees how it will ultimately affect them personally and professionally. Even Meg Whitman’s first memo to the organization, undoubtedly aimed at creating some sense of reassurance and stability, misfired. The text was riddled with references to “we”, meaning Meg and Executive Chairman Ray Lane. Based on that intonation, there will be questions about who is in charge – and everyone is left to question just how viable the organization will be. In both cases HP erodes what is ultimately most valuable in the open market: trust and credibility.

Despite the public drama and speculation, the announcement of Meg Whitman could prove to be a positive turning point for HP. Whitman has a number of hits under her belt, including growing eBay into a powerhouse organization of over $8B and successfully purchasing PayPal. She brings with her the confidence of Silicon Valley, and the (mandated) support of her Board and Executive Chairman. Her roots in consumer businesses might also be the alternate perspective required to reinvent the companies vision and overhaul lines of business.

Enterprises should not erase HP as a potential supplier, but should apply a heavy dose of “wait and see” for the next few months. HP needs to quickly rebuild its stock price and regain credibility through crisp actions from Whitman, or risk being sold off in parts. If Whitman is not successful, there is no reason for any business to take on all that uncertainty when there are other, perfectly viable partners available.

Telwares CEO Charlotte Yates on spectrum and network optimization

From Bill Snyder’s column:

Wireless broadband woes are harder to fix than you might realize

AT&T has taken a huge amount of heat for its subpar 3G performance. Much of the criticism is well deserved, but there’s a larger, more disturbing truth: We’re running out of wireless spectrum. What’s more, networks designed to handle big downloads can’t cope with the peer-to-peer traffic generated by games and smartphones.

“No one was prepared for the effects of [Apple's] iPhone,” says Charlotte Yates, CEO of Telwares, a telecom and IT infrastructure consultancy. Sure. You’ve heard that before, but Yates explains that it’s not just the amount of traffic, as many of us suppose, but the type of traffic, that poses difficulties.

Consider your iPhone, Droid, Pre, or similar device. Much of the time when it’s in your pocket or purse, it’s actually pinging the network to see if you have e-mails, stock updates, or news alerts. Most of those chunks of information are rather small, but when added to the constant polling of the network, they consume lots of resources. Similarly, multiplayer games, Twitter, and social networking sites used on wireless networks are constantly refreshing and pulling down data on what individuals are doing and broadcasting it.

There’s also a less-than-obvious problem caused by big downloads of things like HD video. Networks, says Yates, are designed for two-way communication. In effect, the network is waiting for traffic to come up the pipe and consuming a certain amount of resources as those channels are idle. Thus, massive downloads actually cause both downstream and upstream problems — stress the networks weren’t designed to handle.

“Carriers handle network management differently — even if one carrier is optimized, another may not be. And because networks are connected, the weakest link sets the pace,” Yates says.

Spectrum, like water, is a resource you don’t think much about — until it runs out. And that’s a major challenge facing carriers, consumers, and the government.

“I believe that that the biggest threat to the future of mobile in America is the looming spectrum crisis,” said FCC chairman Julius Genachowski at the CTIA conference in October. He predicted that total wireless consumption could grow from 6 petabytes a month last year to 400 petabytes by 2013. (A petabyte is 1,024 terabytes.)

“So we must ask: What happens when every mobile user has an iPhone, a Palm Pre, a BlackBerry Tour, or whatever the next device is? What happens when we quadruple the number of subscribers with mobile broadband on their laptops or netbooks?” Genachowski said.

Right now, there’s approximately 834MHz of total spectrum available (including 50MHz about to be added), but the FCC believes that most of it — 760MHz to 840MHz — will be needed by 2010, leaving little for future demand. The commission may well expand that, but there will be competition beyond the wireless industry to use it, particularly from the military and emerging entrants to the marketplace, says Yates.

A December 2009 report from Morgan Stanley shows that peak wireless data usage in the United States routinely exceeds 75 percent of capacity, which is a danger sign for carriers, as the figure below shows. Much of that is due to iPhone users, who use the Internet much, much more than other smartphone users (though Android users are beginning to take significant advantage of the Web as well). The financial firm expects AT&T and other carriers to have boosted capacity significantly by 2012 at its cell sites, where much of the bottlenecks occur that frustrate users, thus reducing peak demand to 60 to 70 percent of capacity.

The wireless industry has wrestled with capacity challenges in the past. In the 1990s, AT&T added Digital One Rate plans to its offering. This “one rate” deal was an overwhelming commercial success, adding hundreds of thousands of subscribers — but also overwhelmed a network that wasn’t ready or optimized to receive them in such short order, recalls Michael Voellinger, executive vice president of Telwares.

AT&T, Verizon, and the other major carriers have plenty of responsibility for the limpid 3G service, but if they are to avoid another, much broader meltdown, a lot of players — including the FCC — had better start moving to solve network management issues and the shortage of spectrum. Consumers may even have to moderate their desire for the most bandwidth-intensive applications.