Analysis: BlackBerry outage may accelerate corporate defections

Fri Oct 14, 2011 5:56pm EDT
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By Jim Finkle and Ashley Lau

(Reuters) - John Stuart has been chained to his BlackBerry for years, first as a systems manager for Wall Street bank Morgan Stanley and then as chief information officer for Beverly Hills Wealth Management.

But this week, Stuart ordered an iPhone from Apple Inc, ending his 7-year relationship with BlackBerry maker Research in Motion.

His move highlights how even security-conscious banks and IT managers, who have been among RIM's most loyal customers, are starting to defect, lured by improvements in rivals that challenge the BlackBerry's much-vaunted security features.

"RIM has always been at the top of their game when it comes to device management. Apple has caught up," Stuart said.

The BlackBerry has been losing ground in the business market to the iPhone and, to a lesser extent, devices running Google Inc's Android software, as companies gradually allow their employees to choose their own mobile devices.

This week's massive BlackBerry network outage, which spanned four continents, is likely to speed up RIM's decline. RIM is already fending off investor calls for a management shake-up and possible sale or split of the company.

Many banks already allow employees to choose their devices and the BlackBerry outage is likely to push more in that direction, according to Julie McNelly, an analyst with Aite Group, who advises financial institutions on data security.

"The barn door is already open. Most of the horses are already gone," she said. "This could potentially accelerate the process."   Continued...

<p>Blackberry smartphones are pictured in this illustration photo taken in Berlin, October 13, 2011. REUTERS/Michael Dalder</p>