By midmorning Eastern time today, most BlackBerry users in the Western Hemisphere found that the push e-mail service had recovered from an outage that began last night, and Research In Motion's share price had actually climbed 1.88% on the day. The longer-term ramifications of the massive shutdown for the maker of the popular smartphone, however, could be broader and more troubling.
"This wasn't just a slowdown," said Carmi Levy, senior research analyst at Info-Tech Research Group. "This affected the majority of RIM's global user base. Long term, they now are challenged to show that they're making appropriate changes to the way they run their operation.
"If RIM doesn't truly internalize those changes, and outages continue to occur, they could suffer more than a temporary correction to the share price -- it could cause long-term damage to RIM's credibility and its ability to grow its subscriber base."
Unfortunately, the scope and depth of the outage seemed to be intrinsic to RIM's network architecture itself. While RIM has not specified the source of the breakdown ("root cause is still under review," the company said in a statement released earlier today), it seems clear that it was centered at the company's primary Network Operating Center for North America, located at RIM headquarters in Waterloo, Ontario. This failure raises questions as to whether RIM, which has chosen to keep all of its network infrastructure in-house and in relatively centralized form, can continue to scale to meet demand for BlackBerry services.
"That central NOC is a single point of failure in this global network environment," said Levy. "At some point you have to look at that kind of infrastructure decision and wonder whether it can support the subscriber growth and scale that RIM is currently experiencing."
RIM's subscriber base in the first quarter of 2007 topped 8 million, with approximately three-quarters of those in the Western Hemisphere. Last night's outage represents a huge opportunity for competing providers of less-centralized network architectures, such as Microsoft and Motorola's Good system.
"The NOC-centric nature of RIM's solution has always been a target of its competitors in the past, but usually the competitive message has been FUD [fear, uncertainty, and doubt] around security ('Do you REALLY want your data flowing through someone else's system?')," explained Avi Greengart, principal analyst for mobile devices at Current Analysis. "NOC service outages are a huge gift to competitors' marketing departments, because service outages are real -- end users feel those."
Paul Hinsberg, senior server engineer for Alameda County, Calif., says he supports around 50 BlackBerry users, all of whom found their devices out of service by late afternoon Tuesday. Alameda County also uses smartphones running Microsoft's ActiveSync push e-mail system, which is essentially located and managed in-house.
"ActiveSync is completely reliant on us, and we have redundant systems in-house, so if something goes wrong, we look into it and figure out what's wrong and correct the problem," said Hinsberg. "BlackBerry is essentially an outsourced environment. Whenever there's an outage, this determination has to go on whether it's us or them. Once it leaves our site, we have no insight as to what goes on in their network."
Hinsberg added that the county experienced a similar though less dramatic interruption of BlackBerry service last year -- but he said this incident won't cause him to get rid of the BlackBerry devices currently in use by country officials and staff.
"This was not significant enough to create an enormous change in the way we're addressing BlackBerry, although currently it's much more feasible to use ActiveSync devices instead," he said. "Essentially when you have the type of Exchange license we have, there's no cost to use ActiveSync. With BlackBerry there's a separate server, different devices, and separate costs, just for BlackBerry. Eventually we may end up migrating away from BlackBerry, but that would be years."
For many enterprises considering such factors as cost, ease of deployment, and reliability, this latest shutdown may smooth the migration path away from RIM's still-dominant service. RIM's outsourced environment has been a draw for many enterprises over the years, but as new smartphones from major handset manufacturers like Nokia and Motorola become more prevalent, the Canadian messaging giant faces increased competitive pressure.
"The question that enterprise IT departments need to answer is whether mobile e-mail is mission-critical for their application," said Daniel Taylor, head of the Mobile Enterprise Alliance. "Is mobile e-mail 'nice to have' or something the organization depends on? Because there are many companies where there are hundreds, if not thousands, of workers who are unable to function today because of this BlackBerry outage."