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RIM's BlackBerry Buckling Under Bigger Growth

Blackberry 8800
Blackberry 8800

Research in Motion appears to be suffering from growing pains and while strong sales are usually good news for a company, they could become cataclysmic if the company can't handle the additions.

Our partners at the Wall Street Journal report today (subscription needed) that the massive outage yesterday--the second in nine months for RIM -appears to have occurred as a result of the company's efforts to expand its network operations center. As I wrote yesterday, the last time this happened, it was because a software upgrade to increase network capacity went awry, triggering a massive shutdown. Seems yesterday's outage was a combination of new software and hardware installations that came up short.

The Achilles' heel for RIM could be the way its enterprise network was originally designed: the company uses several central hubs to route the hundreds of millions of emails the company's 12 million subscribers transmit every day. If there's a problem, there isn't much opportunity to offload that traffic to other hubs which may already be stretched to their capacity limits. RIM has spent big money over the past two years trying to expand its networks, but apparently can't expand them quickly enough. As I said in yesterday's post, the company added another 1.65 million new subscribers last quarter alone.

The company released a statement saying it is "continuing to investigate the exact cause of the outage and would provide additional information as soon as we are able to verify the events that prompted the interruption."

That's little solace for the millions of subscribers who were cut off from service for several hours yesterday, and does little to assure them that a problem of this magnitude won't happen again. It's the kind of public relations and technological black-eye that RIM can ill afford, especially as these smart phones become so much more mission critical, and competitors like Apple ,Nokia , Palm and others are looking for any kind of weakness to seize upon.

Sadly, RIM runs the risk of becoming a victim of its own success.

Questions? Comments? TechCheck@cnbc.com

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