RIMMworld

There has been no more pivotal point for RIMM than it faces today.  Way too cliche to even say anything about being on the "rim", Research in Motion stands atop a pile of subscribers, scrambling to retain them with edgy products that're merely playing catchup.  Similarly, I've been in and out of near-term 2012 RIMM Puts trying to play catchup with a market that's been pushing the company down from Mt. Olympus since July of 2008, not allowing the global recovery to (barely) affect RIMM's Belerophonesque plunge.  My catchup plays have been about as eventful as RIMM's ability to combat the AAPL/iOS juggernaut.

As Tamara Rutter reports on Fool.com in "What Blackberry 10 Really Means for RIM" the introduction of the Blackberry 10 at the company's annual partner conference is met with mixed emotions: those stuck in the Triassic with their love of a physical keyboard (guess you can figure the colors I fly) dissed the keyboard-less demon, while AAPL, Samsung and Motorola licked their chops, ready to attack via their respective IP law firms a competitor who may or may not have paid for the relevant technology licenses.  Ms. Rutter points up the historical nature of RIM as "innovative", yet it took them 3 years to produce this tablet phone.  While we can all see the mass of Microsoft's ocean liner that gives seasoned captains the world over the willies in figuring out how to steer the behemoth, RIM's relative tiny size seems like a PT-boat pulling a submerged iceberg (which is probably the combination of their installed base with their proprietary network).

I closed out my Puts today, figuring I'd just take the friggin loss and stop trying to guess what this silly company was gonna do next--therefore didn't jump on the potentially cheap Calls that beckon if the 10 is RIMM's savior.  The touch-screen 10 may save them, but are there content and apps ready to wow the public?  Does their tablet phone have a halo device, ready to serve the function of AAPL's iPhone vis-a-vis the Mac computers?  I truly think that RIMM has bit the dust, is beyond the event horizon, but there are far easier ways to make money than trying to be a Phillip Falcone with RIMM.

..TS.

Fake it till you Make it

As a value investor we are always looking for a reflection  of the quality of management. Do the executives have the shareholders' interest in mind when they make decisions? I am really intrigued by what is happening at Research in Motion (RIMM). A new CEO, Thorsten Heins, has recently taken the reins after being hand-picked by the two original co-founders of the technology company. The two co-founders, originally acting as co-CEO, moved to the board of directors.

The new directive from Mr. Heins seems confusing. If you listen to the latest conference call, the audience can seek whatever message their viewpoint supports. Of course, Mr. Heins has only been on the job for 10 weeks now. So his insistence that he is reviewing everything that would be in the best interest of the company has wisdom. He does seem to have cleaned house and forced several top executive to depart. One of the co-founders, Jim Balsillie will retire, either by force or design.
I hope Mr. Heins has the fortitude to carry-through the needed changes.

Research in Motion new directive in his words are {or at least my interpretation, and call me on it if I'm wrong}

• BlackBerry Enterprise Service Business - Enterprise services
• Prosumer market - which is characterized by users who use the device for personal and business
• Consumer market - "bring your own device/phone" end user market

No, can't differentiate their new strategy from that..... Let's try to differentiate by revenue then:

• Services
• Software
• Hardware
• Other

{my interpretation, and call me on it if I'm wrong}
Mr Heins was talking about reducing the broad array of phones from the 7 new BlackBerry Smartphones to 3 or 4. He was talking about a possibility of licensing the software,  reducing or eliminating the hardware & accessories, repair, maintenance and warranty programs to a strategic partner. Maybe a joint venture? That's a big chunk of the current revenue. It will be interesting to see the evolution in the next 6 months and in the release of BB10.

Here is the elevator speech from the rim website:

RIM is the leading designer, manufacturer and marketer of innovative wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software and service that support multiple wireless network standards, RIM provides platforms and solutions for seamless access to information, including email, voice, instant messaging, short message services(SMS), internet and intranet-based application and browsing. RIM technology also enables a broad array of third party developers and manufacturers to enhance their products and services through software development kits, wireless connectivity to data and third-party support programs.

What are RIM's Competitor's Strategy?
A quick glance at the top competitors strategies in the field:
Apple - Hardware & accessories, Software for the consumer; Just branching out to the Enterprise
Google - Software for the consumer - (Android )
Windows/Nokia - Hardware Partnership and Software (Window 7)

RIM - what is next?
Mr Heins was heard to say in the conference call:

"with BB10 we are getting ready not just for the smartphone, ...getting ready for mobile platform for the next decade"

Will Facebook Make the RockMelt Browser Popular?

According to Wikipedia, RockMelt is a social media web browser. The project is backed by the Netscape founder Marc Andreessen.  It integrates a unique technique for surfing the web that focuses on Google Search Social Media, in particular Facebook and Twitter. RockMelt supports Windows and Mac OS X platforms. RockMelt is based on Google's open-source project Chromium.

You can download  it here. Need some help?

Just recently Facebook has collaborated with RockMelt on a new version of the socially savvy web browser.
TechCrunch says it’s been known unofficially as the Facebook browser.

Where does this leave Bing Search?
Microsoft has it's own deal with Facebook.

"Bing is surfacing in search results which Websites users' friends Liked.
Bing director Stefan Weitz told eWEEK those Websites will bubble to the top of search results. For example, friends who have "Liked" a recipe will have those Webpages surfaced in search results.
Bing will also retrieve information about users from Facebook on the search-results page, and even let users post Bing Shopping recommendations on their Facebook wall.
Moreover, the all-important Bing Bar also includes a universal "Like" button to let users tag any Website they prefer. RockMelt, it should be noted, has already taken a similar approach for its Web browser.
All of these Facebook integration perks are geared to give users personalized search results based on the opinions of their friends.
What this means, opined Duane Forrester, senior product manager with Bing's Webmaster Program, is that decisions can now be made not just with facts, but with the opinions of trusted friends. Forrester added:
"By integrating social signals from the social sphere, we can help guide searchers to the best results. If people feel something is worth calling out socially as "the best," it's obvious hearing their opinions at the time someone is scanning for search results can have an impact on click choices made by that individual searcher."

Google & Twitter have their own versions
Google has the +1 button which allows user to share search results.

TechCrunch continues

"Now, most socially savvy websites already include a “Follow us on Twitter” link, and it’s not exactly an arduous task to click on the link and then sign up to follow a company via the Twitter website. Still, the Follow button should make the process even simpler by not requiring readers to leave their current website"

Cloud Computing and its life cycle

Cloud computing refers to the use of  data/software resources accessible via a external computer network, rather than from a local computer. Users or clients can perform a task, such as word processing, with a browser and with services provided from a cloud based vendor's computational resources.

Pros and Cons from a business perspective
According to Wikipedia, benefits from Cloud Computing are depicted below:

• Agility improves with users' ability to rapidly and inexpensively re-provision technological infrastructure resources.
• Application Programming Interface (API) accessibility to software that enables machines to interact with cloud software in the same way the user interface facilitates interaction between humans and computers. Cloud computing systems typically use REST-based APIs.
• Cost is claimed to be greatly reduced and in a public cloud delivery model capital expenditure is converted to operational expenditure. This is purported to lower barriers to entry, as infrastructure is typically provided by a third-party and does not need to be purchased for one-time or infrequent intensive computing tasks. Pricing on a utility computing basis is fine-grained with usage-based options and fewer IT skills are required for implementation (in-house).
• Device and location independence enable users to access systems using a web browser regardless of their location or what device they are using (e.g., PC, mobile phone). As infrastructure is off-site (typically provided by a third-party) and accessed via the Internet, users can connect from anywhere.
• Multi-tenancy enables sharing of resources and costs across a large pool of users thus allowing for:
  • Centralization of infrastructure in locations with lower costs (such as real estate, electricity, etc.)
  • Peak-load capacity increases (users need not engineer for highest possible load-levels)
  • Utilization and efficiency improvements for systems that are often only 10–20% utilized.
• Reliability is improved if multiple redundant sites are used, which makes well-designed cloud computing suitable for business continuity and disaster recovery.
• Scalability via dynamic ("on-demand") provisioning of resources on a fine-grained, self-service basis near real-time, without users having to engineer for peak loads.
• Performance is monitored, and consistent and loosely coupled architectures are constructed using web services as the system interface.
• Security could improve due to centralization of data, increased security-focused resources, etc., but concerns can persist about loss of control over certain sensitive data, and the lack of security for stored kernels. Security is often as good as or better than under traditional systems, in part because providers are able to devote resources to solving security issues that many customers cannot afford. However, the complexity of security is greatly increased when data is distributed over a wider area or greater number of devices and in multi-tenant systems that are being shared by unrelated users. In addition, user access to security audit logs may be difficult or impossible. Private cloud installations are in part motivated by users' desire to retain control over the infrastructure and avoid losing control of information security.
• Maintenance of cloud computing applications is easier, because they do not need to be installed on each user's computer. They are easier to support and to improve, as the changes reach the clients instantly.

A brief history of cloud computing can be found here.


Life Cycle Model
The technology adoption life cycle model describes the adoption or acceptance of a new product or innovation, according to the demographic and psychological characteristics of defined adopter groups. The process of adoption over time is typically illustrated as a classical normal distribution or bell curve. The model indicates that the first group of people to use a new product is called Innovators, followed by Early Adopters. Next come the early and late majority, and the last group to eventually adopt a product are called laggards.

A description of benefits and drawbacks of the technology adoption life cycle model can be found here.

New Stage for Cloud Computing
Cloud computing seems to have reached a new stage. Everyone is talking about how to incorporate cloud computing into their business plan. Google cloud is here to stay. Apple has come out with their iCloud and will also offer at least some of the services for free. We all make fun of the Microsoft "to the cloud" commercials.

It seems like the cloud idea is at least in the "early majority" phase, maybe further down the bell curve. How long will this last? I don't know, but the first test will be when a leading vendor is hacked and private corporate data is lost. Security, Privacy and Legal issues will arise. For many IT pros, the most important consideration for all cloud based services is that they have to depend on servers that someone else owns and controls.

Conclusion
Actually, the "Hybrid Cloud Model" will most likely prevail. A hybrid storage cloud uses a combination of public and private storage clouds. Hybrid storage clouds are often useful for archiving and backup functions, allowing local data to be replicated to a public cloud. HP, IBM, Oracle and VMware offer technology to help manage the complexities of performance, security and privacy.