Analysis: BlackBerry outage could accelerate shift to iPhone

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 safety 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 allowed 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, analysts said.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.”The BlackBerry used to own the corporate market because companies believed RIM was best at protecting enterprise data and prevent the theft of corporate secrets.The outage highlights RIM’s Achilles heel: the fact that all BlackBerry messages are routed through its own data centers means information is more secure, but it also creates a single point of potential failure.Messages sent through phones from Apple and other vendors do not travel through any central network, so they do not have that same weakness.While that has meant rival phones were less secure in the past, many security experts say the iPhone has caught up to the BlackBerry, thanks to improvements in Apple’s latest iOS software. And for Android phones, a proliferation of third party security software have also helped.”In most ways, iOS is at least as secure as BlackBerry, namely in malware prevention, exploit prevention, etc.,” said Charlie Miller, principal research consultant with Accuvant and a highly regarded expert on mobile security.He said the BlackBerry is still superior in data encryption and manageability, but added that “reliability obviously is a problem recently for Blackberry.”CONSUMERIZATIONApple is a big winner when workers get to pick their own phones, a trend known as the consumerization of IT. The iPhone 4S hit store shelves on Friday and thousands of people lined up around the world to get it.Companies can save money when they let employees buy their own phones and pay their own monthly bills. All IT managers have to do is install software that makes it possible for employees to securely access corporate networks.At Credit Suisse, which only started this year to open its network to Apple and Android devices, about one-third of its 25,000 BlackBerry users have already switched phones.That has saved the European bank millions of dollars, according to Stephen Hilton, Credit Suisse’s global head of technology infrastructure services.”We are seeing very rapid adoption of this ‘consumer technology’ platform,” Hilton said. “I suspect this (outage) would be another reason why people may reconsider.”An Aite Group poll of 402 wealth managers conducted before the outage found that 45 percent would choose an iPhone or iPad, compared to 14 percent for a BlackBerry.A survey released this week by Enterprise Management Associates, sponsored by Intel Corp’s McAfee Inc, found that 44 percent of iPhone users were “completely satisfied” with their device, compared with 34 percent for Android smartphones and 16 percent for BlackBerries.”It’s a tough situation to be in,” Forrester Research analyst Christian Kane said of RIM. “Nobody is going to necessarily stop supporting a device over an outage. But it doesn’t do any favors for RIM,” said Kane, who helps big companies decide how quickly they should open up their mobile networks.It’s a mark of the inroads that rivals have made into the corporate market when this week’s BlackBerry outage was shrugged off by many on Wall Street.One finding of an informal Reuters survey of more than 25 financial firms was that a lot of people simply were not bothered by the service interruption, compared to the panic that ensued when the BlackBerry went down in April 2007 and again in February 2008.Wells Fargo said some people saw intermittent disruption to some services; at least two regional banks and one investment bank also said problems were irregular at best and limited to only some employees.One Wall Street banker said he would not have even noticed had his firm’s IT department not said something.”We allow and support a broad range of mobile devices, and expect we will continue to do so. These devices have been stable for a long time, and while we are not happy about the recent outage, we have no immediate plans to discontinue use of the product,” a spokeswoman for JPMorgan Chase & Co said in an e-mail.It is hard to estimate BlackBerry’s corporate market share as RIM does not give out much information. But its share of the global smartphone market fell to 11.7 percent in the second quarter from 13.0 percent in the first quarter, according to estimates from Gartner analyst Ken Dulaney.In contrast, Android’s share rose to 43.4 percent from 36.4 percent, and Apple’s rose to 18.2 percent from 16.9 percent.(This story corrects the name of Enterprise Management Associates in theseventh paragraph after the subheadline “Consumerization”.)

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RPT-RLPC-Market volatility hits Kondor financing -bankers

LONDON Oct 14 (Reuters) - Vista Equity Partners is facing challenges financing its acquisition of Thomson Reuters’ trade and risk management software business, including flagship product Kondor, banking sources said on Friday.Vista bought the businesses for more than $500 million in cash in September after winning an auction. The private equity company is trying to finalise a larger financing package than originally envisaged, but the deterioration in market conditions since August may limit the size of the loan, bankers said.Vista had agreed a $185 million of drawn debt with GE Capital, ING, Lloyds and Royal Bank of Canada in September, but subsequently tried to increase the amount of debt to $220-$230 million, which was in line with debt offered to rival bidders Cinven, Bridgepoint and Montagu Private Equity, the bankers added.Some of the four banks were unwilling to increase the size of the financing due to market volatility. Vista is currently approaching a wider group of banks after first talking to banks that backed rival bidders.The financing was expected to be decided by early October, but negotiations are still continuing, the bankers said.”Vista is struggling to get the higher amount of debt in place,” one of the sources said.The level of debt Vista manages to raise will not affect the acquisition itself, only the amount of equity Vista will have to contribute.A final sale and purchase agreement for the proposed transaction with news and information services provider Thomson Reuters is expected to close by Jan. 31, 2012. Barclays Capital acted as sole financial advisor to Thomson Reuters.The trade and risk management business operates under the Thomson Reuters enterprise solutions business. Kondor provides trade and risk software as well as liquidity risk systems for treasury and cash management operations. Its main competitors include Misys, SunGard and French software solutions company Murex.Vista and GE were not immediately available to comment.

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Chicago police arrest 21 protesters for trespassing

The arrests came a day after thousands of people including teachers, religious leaders and union workers marched in downtown Chicago to voice mounting anger over joblessness and economic woes in protests that snarled rush-hour traffic.Those marches, organized by the “Stand Up Chicago” coalition, had appeared to target financial events in the city including a conference of the Mortgage Bankers Association, which was also subject to protesters’ ire on Tuesday.Organizers said Monday’s march was inspired by, but not formally affiliated with, the Occupy Wall Street movement that began in New York last month and sparked smaller protests nationwide.On Tuesday, sixteen people were arrested at a protest at the Hyatt Regency in downtown Chicago where the annual conference of the Mortgage Bankers Association was underway, the Chicago Police spokesman said.The 16 people arrested at the conference were facing charges of misdemeanor trespassing, he said.Separately, five women aged 55 to 80 from the Action Now group were also arrested after they took garbage from a foreclosed home owned by Bank of America and dumped it in one of the bank’s branches, the group’s website said.Police said that group was also facing charges of misdemeanor trespassing.Action Now, which calls itself an organization of working families fighting for change, said Bank of America had not properly shuttered the foreclosed home from which the group took the furniture and garbage.”Since Bank of America will not go to our neighborhoods and clean up their vacant properties, Action Now members brought the neighborhood to them,” the group said on its website.Bank of America did not immediately respond to an after-hours request for comment.Chicago has also seen several weeks of daily protests outside the Federal Reserve Bank by “Occupy Chicago,” an echo of the larger Wall Street protests.

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