Blackberry have confirmed today that their email, internet and messenger services are now coming back online after a 3-day service blackout which has brought into sharp-focus the inability for RIM to communicate the problem to their frustrated customers.
In a statement this morning at 5.30am, RIM said there is "a significant increase" in Blackberry service level in Europe, the Middle East, India and Africa.
The three-day outage has been a PR disaster for the Canadian technology company, with thousands of customers taking to social networks the vent their frustration, RIM CIO Robin Bienfait apologised to BlackBerry customers for the disruption in a statement last night.
“You’ve depended on us for reliable, real-time communications, and right now we’re letting you down,” he said.
“We are taking this very seriously and have people around the world working around the clock to address this situation.”
Benait said last night that RIM is working to clear the backlog of messages, he added that BBM is up and running, but web browsing was unavailable as their support team monitors the stability of the service, but hopefully will have the service online “soon”.
For those of us who use other handsets, namely the iPhone or Android - it seems rather odd that users internet access is dependent on RIM, for iPhone's or Android's or any other phone web access comes from the phone and the Wi-Fi – it has nothing to do with the manufacturer - so quite why Blackberry's need to rely on a system that clearly has major flaws in it is quite worrying.
Especially worrying is the fact that many companies are heavily reliant on Blackberry and when the system crashes it leave millions in the dark - clearly the architecture of the system isn't quite as bullet-proof as RIM has made us believe. Could this be the last nail in the coffin of RIM and BlackBerry?
Customer backlash
A senior investment banker at a major Wall Street firm kept sending out e-mails on his BlackBerry on Wednesday morning. And they kept bouncing back, annoying him.
"It's one of those things - you don't realise how important it is to breathe, until you can't do it," said the New York-based banker, who declined to be named because he was not authorised to speak about the subject on behalf of his bank.
According to RIM the problem originated in the UK, more specifically in Slough, as a major network switch failed, and then the backup system failed as well. According to the company is was a Chernobyl-like shut down of the system – which then rippled around the world. At RIM’s annual customer conference, taking place in London yesterday, the company’s UK MD, Stephen Bates, said: “We are dealing with over 20PB of data every month so you can imagine the disruption we are trying to resolve.”
British technology entrepreneur Lord Alan Sugar took to twitter to lambast the company for the outage, he tweeted: “In all my years in IT biz, I have never seen such a outage as experienced by Blackberry. I can’t understand why it’s taking so long to fix”.
The final nail in the coffin
The way RIM handled the issue left many wondering why they are with a company that failed to communicate the problem, and didn’t make a spokesperson available. Compounding the problem even further, is the fact the Apple release its new mobile operating system iOS 5 – which now comes with software like iMessage, an instant messaging technology that is exclusive to Apple, doesn’t require servers to work and duplicates many of the same features offered by RIM’s BlackBerry Messenger platform, a key differentiator for the company.
RIM is having quite a dip in its fortunes – it’s losing marketshare to both Apple and Android, despite that fact that they are the forth most popular smartphone operating system – they are apparently loosing 500,000 customers in the US every month. They have tried to branch out in emerging markets like India, but they are being halted by the popularity of cheaper Android handsets. This has led to a group of investors floating the idea of the sale or break up of the company. The current woes couldn’t have come at a more awkward time.
RIM has struggled with delays in future handsets, their tablet has been a unmitigated disaster and their share has slumped to a five-year low. Over the quarter; it sold 10.6 million phones, down from 12.1 million in the same period last year.
The outage brings in the sharp focus the woes of the company, and may see major companies rethinking their reliance on a technology that is showing signs that it's not a reliable as previously thought.
It's thought that RIM could be broken up into a network company, a handset and patent company. The breakup could attract private equity buyers and would also be target for other companies like Microsoft, Apple or even Oracle.
In February RIM shares were trading at nearly $70, but today are worth just $25 - quite when the slide will end is anyone guess, but losing two-thirds of its value in eight months is very worrying to investers and customers alike. BlackBerry has become the standard for business users, its rise seemingly unstoppable until earlier this year, since when the reversal in its fortunes has been swift and dramatic.
RIM was one of the success stories of the last 5 years, with its revenues doubling over the last three years to $5.6bn. But the last 3 quarters have seen a monumental decline. The company saw profit collapse over the summer due to the lack of models; low demand for its tablet computer and the unstoppable rise of the iPhone and Android mobiles took their toll.
Income before tax fell 54% to $414m (£262m) in the quarter to 27 August, from $904m in the previous quarter. Revenues fell to $4.2bn, at the bottom end of the company’s own forecasts.