The maker of the popular BlackBerry is on the financial ropes. What does it mean for feds?
BlackBerry maker Research In Motion has had a couple of rough years, prompting some experts to speculate whether the Canadian telecommunications equipment company is inching closer to its demise. It's quite the change from just five years ago when RIM was leading the smart phone sales game with its seemingly ubiquitous BlackBerry line of handheld devices.
But with competitors such as Apple’s iPhone and other Android-based devices rapidly gaining ground and winning over customers, RIM has lost its edge on the market. Its stock has fallen to unprecedented low levels, and has in the past year lost 77 percent of its value.
Adding to RIM’s hardship is the laundry list of misfortunes, including a multiple-day global service outage in October 2011, which prompted infuriated users to take to Twitter to vent their frustrations. Another service disruption occurred in March 2012, affecting users in the Asia Pacific region. The problem was solved within hours but it nonetheless added to the PR nightmare RIM had been plagued with.
For RIM, dusting itself off and regaining customers’ trust will continue to be an uphill battle, said Benjamin Robbins, principal at Palador, a Seattle, Wash.-based consulting firm that provides strategic guidance in mobility, policy and apps.
“Not only have they fallen behind in terms of capabilities but they also have lost their preeminent place as a ‘secure’ solution,” said Robbins, a guest contributor on mobility for the Guardian. “Organizations can now experience greater productivity and the same level of security as was once only achieved with [BlackBerry].”
For many federal employees, the BlackBerry has been their smart phone of choice primarily because of its built-in security features. The Defense Department, for example, in May approved agencywide use of BlackBerry 7 smart phones, Government Computer News reported.
However, BlackBerry’s status as the go-to device for feds could be changing. General Service Administration CIO Casey Coleman told Reuters that although the BlackBerry remains the most commonly used smart phone at the agency, GSA has begun issuing iPhones and Android-based devices to some of its workforce.
RIM is unlikely to go belly up anytime soon, experts say, but in the event of a demise, agencies would have to identify an ecosystem of devices and software that provide the same level of security BlackBerry does, Robbins said. He added that he foresees best practices emerging from those agencies on the leading edge of mobility and others quickly following suit.
“From a perception standpoint, Apple and iOS has a better reputation for security than Android, so I can see iPhone and iPads emerging as the device of choice to replace RIM,” he said. “On the security side, there are several MDM vendors who are already present in government agencies that would be in the running. I don’t imagine one would beat out the rest; rather, there would be several variants of recommended best practices for security.”
If RIM does go bankrupt, it would not necessarily disappear, said Tom Suder, founder and president at Mobilegov and co-chair of the American Council for Technology - Industry Advisory Council's committee on mobility. He recalled former telecom giant Worldcom, which went bankrupt in 2002 yet continued providing telecommunications service to 70 percent of all agencies using the FTS2001 telecommunications contract. Worldcom also supported the Navy Marine Corps Intranet, DISA, and the Federal Aviation Administration through other contracts.
“There was no interruption in service, and eventually the assets were purchased by Verizon,” Suder said.
Robbins agreed, saying his prediction was more of RIM selling a portion of its assets rather than a experiencing a complete lights-out scenario.
“Depending upon the buyer, agencies would have time to evaluate whether to continue with the new BB or make a change based on security first, capabilities second,” he said.
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