The UAE has officially stated that as of October 11th, they will be cutting off BlackBerry services. The Telecom regulators have said that the fact that data is handled and stored offshore, outside of government control, makes BlackBerrys an unacceptable security risk.
For those who don’t know, the BlackBerry platform architecture relies on dedicated data centers (NOCs) which handle all BlackBerry data traffic over a secure, encrypted connection between the NOC and the handset. Some governments are uncomfortable with the solution because they have little or no visibility into BlackBerry data traffic, and are concerned that BlackBerry handsets may be used for criminal purposes.
Security is paramount for RIM as it allows them to sell to governments and armed forces around the world. The BlackBerry is the gold standard for enterprise security but it’s a double edged sword when selling to countries that want more visibility into what their citizens are doing.
The greater issue that is at hand is that security and a totally secure “pipe” is a key selling feature for BlackBerry. If RIM were to acquiesce to the UAE’s demands, it would significantly undermine its security credentials, particularly with business and public sector customers. If RIM were to allow the UAE access to BlackBerry communications, it would set off a chain of events that would lead other countries to demand similar access.
This is exactly why RIM should cut its losses with the UAE and perhaps all countries requiring the same amount of access. If RIM starts acquiescing to countries around the world, it’s almost guaranteed that it will lose its ability to sell itself as the premier smartphone for security and enterprise. The gains that RIM will make in the Middle East and Asia where governments are requiring more visibility will do more damage to their current markets where their revenues are based.