According to a popular if crass bumper sticker, “stuff” happens.
In the case of outages or slowdowns for Research In Motion Ltd.’s BlackBerry service, stuff happens pretty rarely.
But a days-long outage this spring and a day-long outage and slowdown in e-mail traffic Sept. 7-8 at least raised the question in pundits’ minds whether consequences for the firm could accrue from such events.
The effect of the outages, some observers complained, has been compounded by RIM’s initial silence and subsequent opacity or jargon over the cause.
“A little transparency would go a long way,” wrote ZDNet commentator Larry Dignan last week on Seeking Alpha.
RIM did not post any information on its latest outage on its Web site and did not immediately respond to a request for comment.
Analysts agreed last week, however, that RIM’s hold on its enterprise users-probably the bulk of its 8 million subscribers-is secure. The service largely works as promised, devices keep abreast of trends and investors keep driving up the company’s stock.
Any impact of service outages likely would come as RIM seeks to expand its base beyond the enterprise into the vast consumer market, analysts said.
In the past year, the company has launched devices such as the Pearl and the Curve-which provide multimedia entertainment features, as well as I.T. controls-sold through the national carriers.
Enterprise users addicted
“RIM has been surprisingly bullet-proof in many respects,” said Tero Kuittinen, analyst at Avian Securities L.L.C. “The outages have never caused a problem for the company. This aura of invincibility has caused the euphoria over the shares of RIM.”
“RIM’s corporate niche is secure for the near term,” Kuittinen added. “But as it moves deeper into the consumer space, user tolerance for various quirks may become lower. The big issue is the number of free or low-cost e-mail services that are proliferating. So far, none of them has taken off in a big way, but they are pretty compelling.”
Carl Howe, analyst at Blackfriars Communications Inc., agreed but said that larger issues were at play.
“As RIM gains more consumer subscribers, outages will become more of a story,” Howe said.
But, he added, “there’s no question that complexity is the enemy of reliability.”
Hence, stuff indeed happens. And with the expansion of its market to consumers, “stuff” could “hit the fan.”
“Before RIM introduced the Pearl, I would guess its subscribers were 90% enterprise users who are in effect locked in,” Howe said. “RIM provides those customers with no alternatives, so users are stuck with whatever reliability issues exist. (Enterprise) I.T., once it has committed to a technology, rarely backs away. The cost of change, both in dollars and credibility, is just too high.”
Consumer choice
“As they expand their base to include consumers,” Howe said. “Those are customers who have the choice to go with another e-mail platform.”
In a sense, Howe said, RIM wants to “have it both ways.” RIM’s product is integrated-it makes the handset and the server that sits in front of enterprise servers to push e-mail out. RIM is responsible for everything in between their handset and their server-the “one-provider-makes-it-simple model.”
“The problem is, that’s only one piece of the puzzle,” Howe said. “As they attack broader markets, such as the consumer market, someone else runs that server for you. Or, as they integrate with Microsoft [Corp.’s] Exchange systems-a whole different kettle of fish-then you get a lot more complexity. The more complex systems get, the harder it is to make them bulletproof.”
Back on the enterprise side, Bob Egan of Tower Group, who works with companies on enterprise mobility, agreed that periodic outages are not likely to shake the company’s primary market.
“Frankly, I never hear a peep out from CIOs (chief information officers) on the intermittent outages,” Egan said. “In many cases, the issue is resolved before a user knows if it’s RIM or an internal company issue.”
