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Blackberry Outage Costs £150 Million

Shares in the maker/operator of Blackberry, RIM, fell by 50c on Friday following the loss of email service for many users in Europe and Africa.  This equates to a total loss of value of approximately $240m (or £150m).  Whilst the outage only lasted a few hours, and was much less widespread than the similar incident in October last year; RIM has clearly been punished very severely for this latest disruption.

Firstly there is a general trend that the market judges firms much more harshly for a ‘repeat offence’ as opposed to a single, isolated IT disruption; the suspicion being that repeated problems signify serious underlying problems in the management of IT.  Secondly, the incident re-emphasised the reliance of Blackberry users on RIM’s own IT infrastructure.  Whilst this was once seen as an advantage (particularly by corporate customers) in that it provided a greater degree of security; reliance on a single provider’s network is now viewed as more of a liability.  Finally the events of Friday served as a reminder that, despite assurances given at the time, we still don’t know what really went wrong last October: it is no good saying all the right things at the time if you then fail to follow up.

More details on the market impact of operational disruptions are available in the ‘Download’ section of the website.