This has been an interesting morning. Instead of chatting about processor stocks this morning as I expected, we took a hard right turn and covered Research in Motion's outage instead. If you missed it, Blackberries in North America went down for about eight hours and this is the second major outage this month. This comes at a time when the U.S. government is pushing open systems (RIM isn't) and when users are increasingly trying to get iPhones and Droids into their companies.
Can RIM hold?
In theory, RIM's model has an advantage in that the services are largely controlled through its own centralized infrastructure. This allows the company to control updates and patches, and assure its services and the security of the related devices centrally. Apple is the closest to this model, but historically has lacked the focus on IT needs that has kept RIM dominant in the business space. In fact, the only real challenger to RIM in business is Microsoft at the moment, but Google and Android are positioning to come up fast.
This centrally controlled advantage became a disadvantage when a bad update took down all Blackberries last night. In other words, RIM instituted an update that wasn't adequately tested. Without a good fallback plan, its entire U.S. network went down. This is when centralized control becomes a huge problem. There should be no single point of failure that can take down an entire country of phones. Imagine a disgruntled employee, terrorist attack or natural disaster.
Suddenly RIM looks unacceptably unreliable, and that doesn't bode well for RIM's future.
Neither Microsoft nor Google is as centralized, and management tools, where Microsoft currently leads, typically are implemented company by company. A bad patch could take down a company, if applied improperly, but probably not an entire nation. Google hasn't yet rolled out its enterprise solution, but it is based on a cloud model which, while often problematic, is more likely to take down a single service if there is a bad patch rather than all the phones' services.
Of the two, Microsoft is more technically able to take advantage of this shortfall, but Google is in the midst of a major platform and marketing rollout (Droid), which suggests it might be the bigger beneficiary. Google is beginning to do the enterprise dance and isn't quite ready with an enterprise solution yet, but this outage should get people talking to the company, particularly the U.S. government. And once engaged, deployment -- and RIM replacement -- is vastly more likely.
Why not Apple?
Why not indeed? Phones remain largely user driven and Apple has not stepped up to an enterprise push. However, by reducing the dependability of the RIM platform, those who want iPhones should find it easier to get them through a corporate approval process. Apple is not spiking at the moment with a new phone and doesn't have or appear to be building an IT-compliant service structure, so it shouldn't benefit from this as much as Google. But Apple likely will benefit and its phone is the most popular in the class at the moment.
Wrapping Up: Five Nines
Communications are critical. We expect 99.999 percent uptime, and RIM is not providing that at the moment. Less than that is not acceptable. As the one well-positioned enterprise vendor, RIM can ill afford to be viewed equally with the consumer-oriented platforms from Apple and Google. Microsoft has an opportunity to make some inroads, but its most attractive phones, the HTC HD2 and HTC Leo, are not yet available, and Microsoft isn't able to roll out a Droid-like program at the moment.
Still, Google has some conflicts it has to work through with news of its Nexus One starting to stall Droid sales (it is showing better than the iPhone or the Droid at the moment). Assuming RIM doesn't have another major outage, people, who generally don't like change, may largely stay with RIM.
Why haven't I mentioned Palm? It just hasn't been a factor of late (but it is the riches-to-rags story of 2009).
In the end, however, Research in Motion needs to step up and fix its reliability issues or it will be stepping out of the enterprise market and giving Google, Microsoft and/or Apple a great gift for 2010.