Analyst: Cut RIM Some Slack Over BlackBerry Outage!
BlackBerry users are pretty upset with Research in Motion (RIM), after the service failed for three consecutive days earlier this week.
As BlackBerrys come online, we are hearing that the outage may cost RIM up to $120 million, but the real damage may yet to be come in the form of users abandoning the company. Investors who have called for the sale for the company may get more visibility as well.
However, there is at least one analyst who says that RIM deserves mercy, as it could not have anticipated this outage. Jack Gold from J. Gold Associates said that such failures cannot be prevented due to the complexity of the systems behind them. "No doubt people will criticize RIM. But we need to look at this rationally, and understand that all of these systems are so complex, it’s highly likely there will be failures."
Gold wrote in a research note sent to clients that "it’s surprising there are as few failures in these massively complex systems as there are. So while I too lost service, I am inclined to cut RIM a bit of slack here, as it seems they were not the ones at fault (sounds like they have some real work to do with their infrastructure vendors who sold them a redundant switch that apparently wasn’t)."
Gold, noted that it was surprising that it required an extended period of time for RIM to solve its problem and criticized that the company did not talk to the public sooner about the issue, but noted that the nature of the problem made it hard to identify.
All of those possible excuses, however do not help RIM. In a time of declining market share, Gold said that "everyone [is] looking at them with a magnifying glass" and the outage receives much more attention than it would have been exposed a few years ago. " That’s not to say a failure of this magnitude wouldn’t have been noticed. But RIM’s current challenges mean increased scrutiny," Gold wrote.