This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Cut RIM Some Slack on BlackBerry Disruptions

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (TheStreet) -- By now of course, nearly everyone has heard about the several days of the largely unexplained worldwide outages affecting BlackBerry services around the world.

I was just listening to the RIM (RIMM) press conference to try and get a little more clarity about what happened. Here are my thoughts/comments about this:

First, I take them at their word that it was a hardware failure of what was supposed to be a fully redundant core switch. Unfortunately, as good as we think we are at designing redundant systems, there are numerous examples of such systems not being truly redundant and failing massively. What did surprise me, however, is that it took so long to rectify the problem.

Second, while no time is a good time for a massive system failure, the time of this failure, given RIM's position in the current market with dropping market share and everyone looking at them with a magnifying glass, means that this failure has much higher visibility than it might have gotten a couple of 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.

Third, we should remember that there is no such thing as a totally fail-proof system. SMS systems have gone down. Gmail, Yahoo! and Hotmail have gone down. Carrier outages, while rare, have occurred. Even iTunes has had glitches on occasion. So we need to be careful to understand all systems can have this kind of issue, and we need to look at the relative up time of the system (although obviously everyone always focuses on down time because of the disruption). The BlackBerry service actually has a pretty good record of up time (99.97% if I recall correctly). That's probably better than most Exchange servers in large organizations and better than many ISPs and web hosting services.

Fourth, while I think RIM should have been more upfront with the public about the problem and done it sooner, I also believe it probably took them a while to determine the crux of the problem. Most systems like this are computer-modeled in great detail before being installed to try and find potential problems. In all likelihood, the failure mechanism involved was not part of any modeling, and so it was hard to find. That is probably why it took them some time to determine what was going on.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,118.98 +67.25 0.39%
S&P 500 1,985.12 +11.49 0.58%
NASDAQ 4,461.1820 +36.4780 0.82%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs