Scared of a BlackBerry shutdown? The cost to switch could be equally terrifying

Even with the looming threat of a BlackBerry shutdown, it may be more cost-effective to wait it out, considering that a switch to a new mobile e-mail service could cost a bundle.

Even though it's scary to think that BlackBerrys across the country could eventually be nothing more than expensive

paperweights, a hasty switch to another provider could be just as chilling, and downright costly.

In a recent report, Jack Gold, principal and founder of research firm, J.Gold Associates, tallied up the estimated cost per user for a company to switch from BlackBerry to another service, such as Good Technology, on a Palm Treo.

By Gold's estimate, the migration would cost about $845 per user. While that may not seem like much on the surface, consider a massive company with 1,000 BlackBerrys deployed. To get all of those users up and running with a new service would cost roughly $845,000.

"The big problem is many companies are looking at this and they're not understanding the guts of the problem," Gold said. "Before you go crazy on this stuff, at least understand what could happen."

Here's how Gold broke it down to reach $845:

  • $300 per user for new devices. That price is middle-of-the road, and could go up or down depending on each company's preference.
  • $280 per user for downtime and loss of productivity, assuming each person loses about four hours getting acclimated to the new device.
  • The remainder is the cost of deploying the devices; the software purchases and licensing fees; the IT department training and helping users get up and running; and other incremental costs.

"All of this stuff adds up and adds up quickly," Gold said. "It's not as cheap and easy as they may think."

Research In Motion Ltd. (RIM), the Waterloo, Ontario maker of BlackBerry, has been embroiled in a vexing, back and forth patent infringement suit with Virginia-based NTP Inc. for the past four years. NTP claims to hold patents that BlackBerry infringed upon to create its widely popular mobile e-mail platform. All five of the disputed patents held by NTP have been rejected by the U.S. Patent and Trademark Office, making a strong case for BlackBerry.

However, late last year RIM was dealt a blow when the presiding judge refused to allow an agreed upon $450 million settlement. Additionally, NTP asked for an injunction that could result in a nationwide BlackBerry blackout. The case has been sent back to a lower court, where a judge is expected to rule on the injunction Feb. 24.

The potential for an injunction has prompted many respected research and advisory firms, including Gartner Inc., to warn against deploying BlackBerry until the matter is resolved. Many experts have also advised clients to seek alternatives to the mobile e-mail service that many have dubbed "CrackBerry" because of its so-called highly addictive nature.

There comes a point where people say, 'I'm loyal, but this is business.'
Bill Hughes
AnalystIn-Stat/MDR

 The U.S. accounts for 3 million of the roughly 4 million BlackBerry users globally. And though there is no concrete estimate of how many are corporate vs. personal users, Daniel Taylor, executive director of the Mobile Enterprise Alliance, said there are about 1.8 million enterprise users in the U.S. Of the remainder, 1.1 million are self-employed or work in small- to mid-sized businesses or small-office/home-office environments. That leaves about 100,000 as strictly personal users, who do not use BlackBerry for any business needs.

Gold said it is a good time for business users to scout alternatives, but it might not make business sense just now to drop a hefty stack of greenbacks on a new, high-cost mobile e-mail service.

"Why would you hold back your business on a 'what if' scenario?'" Gold asked. Gold advises that if it makes business sense, companies should continue rolling out BlackBerrys, regardless of the possible shutdown, which Gold contends isn't likely to happen anyway.

"At the end of the day, when push comes to shove, RIM is going to cut these guys a big, fat check," he said. Many estimates indicate that RIM could pay NTP as much as $1 billion and a percentage of royalties to make the patent dispute go away.

At least one recent survey found that U.S. corporations aren't too concerned about the high switching costs. In a survey published late last month by Scottsdale, Ariz.-based research firm, In-Stat/MDR, more than a third of enterprise BlackBerry users said they would drop the e-mail service like a bad habit if there was a shutdown.

About 36% of those polled by In-Stat said they would immediately switch to another mobile e-mail provider in the event of a blackout, said In-Stat analyst Bill Hughes, who conducted the survey. Thirteen percent said they anticipated a shutdown would be resolved quickly and would ride it out before considering jumping ship. A mere 7% said they would stick with BlackBerry as long as it takes. The rest were undecided. The survey polled 76 corporate BlackBerry users.

Hughes said the survey disputes recent rumors that BlackBerry users are an extremely loyal bunch. "There comes a point where people say, 'I'm loyal, but this is business,'" he said.

Jill Stelfox, CEO of Defywire, a Herndon, Va.-based mobile e-mail provider, agreed that alternatives should be researched and investigated. However, she said that any company looking at a possible mobile e-mail switch may have to act soon, or the market may not be able to keep up with the booming demand.

If the judge rules to shutdown BlackBerry on Feb. 24, Stelfox said there will be a 30-day grace period before it is actually enforced. RIM has been working on a software workaround that the company said would keep the service running, but very few details of that contingency plan have been released. Still, Stelfox said, if the injunction is upheld, that 30-day window could ignite a firestorm of panic and a mad scramble for new devices, many of which may not be available.

"The risk is, during those 30 days, is Cingular going to have enough [Palm] Treo 650s?" Stelfox asked. "If I was an IT manager and I had 50 or more BlackBerrys, I would be looking at alternatives today and securing devices. You can't count on the fact that [RIM and NTP] will work it out. It will be panic in the streets. It will be a race on devices."

Along with Defywire and Good Technology, there are several mobile e-mail alternatives to rival BlackBerry, and many have started circling like vultures waiting for the reigning mobile e-mail champion to die. Those competitors include Notify Technology Inc., Intellisync, Visto and Seven Networks, along with a host of others.

Defywire's Stelfox said switching is not as costly as Gold indicates. She said the bulk of expense would come from buying the new devices, and many BlackBerry competitors are likely to offer discounted rates for large purchases.

"The cost to switch, from what I have seen, is much lower," she said.

For more information

Read why some experts warn against deploying BlackBerry

See where BlackBerry ranks among the best devices of 2005

 Gold and Stelfox agreed, however, that companies have a valid reason to panic, since they've grown accustomed to simple mobile e-mail access, so much so that for many it has become a necessity to conduct business.

"There are a lot of customers that are concerned, without a doubt," Gold said. "And they should be. We're talking about wireless e-mail, which has become mission-critical for many companies."

Stelfox agreed. "The concept of being able to respond to mail on the fly, that's never going to go away," she said.

But Taylor, from the Mobile Enterprise Alliance, said a lot of IT managers responsible for BlackBerry deployments aren't exactly worried. Taylor said some managers said, "We're only deployed to about 400 executives, so we're not worried about losing service for a few days," and "it's not like we'll start losing money because BlackBerry is shut down."

While top executives might have little concern about a BlackBerry shutdown, Taylor said field service professionals will be the ones hit hardest, since they need necessary applications such as inventory, ordering, CRM, SFA and others from the road. For field service workers, Taylor said, a blackout could be catastrophic, because companies would be unable to deliver products and services, causing corporate revenues to suffer.

"What the IT managers are saying is … if a BlackBerry injunction were to shut down services for several thousand field service professions, then the injunction would be worth worrying about," Taylor said. "And that would be the point where a company would consider alternative platforms. That would also be the point where an alternative platform could be cost-justified."

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