This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
TheStreet Open House

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

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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!
SYM TRADE IT LAST %CHG
AAPL $123.25 0.00%
FB $83.30 0.00%
GOOG $548.34 0.00%
TSLA $185.00 0.00%
YHOO $45.10 0.00%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

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