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RIM bumps into the politics of global business

Disputes in the Middle East and elsewhere are a cost of running a global servicernrn

Research in Motion is getting a tough lesson in geopolitics.

Its problems in the Middle East and Asia this week show the challenges technology companies face when they expand into parts of the world where ideas about security and the right to privacy are very different from those back home.

“It’s an interesting example of how different cultures can create challenges as new technologies become popular and expand around the world,” said Gerry Purdy, principal analyst at Mobiletrax.

Saudi Arabia and the United Arab Emirates both threatened this week to suspend BlackBerry services if RIM doesn’t provide a way for them to access its customers’ messages, which they say they need for security reasons. The Saudi ban is due to start Friday and the U.A.E. ban in October.

India and Indonesia have made similar requests in the past, and talks with those countries are ongoing. Indonesia said Thursday it won’t ban the BlackBerry service, but it wants RIM to put a server inside the country to handle communications there.

Observers see it as a political and cultural issue as much as a technology one — something that was borne out Thursday when U.S. Secretary of State Hillary Clinton got in on the act.

“We are taking time to consult and analyze the full range of interests and issues at stake because we know that there is a legitimate security concern, but there’s also a legitimate right of free use and access,” Clinton said at a news conference Thursday, according to reports.

Canada’s trade minister said his government will be “standing up for RIM as a Canadian company,” the reports said.

RIM’s problem is that it designed the BlackBerry system specifically to be immune to snooping. The company insists that even RIM can’t access the messages of its large enterprise customers, which have BlackBerry Enterprise Servers with encryption keys on their premises.

RIM has tried to take a firm stand on the issue, saying it won’t bow to government demands and that “customers of the BlackBerry enterprise solution can maintain confidence in the integrity of the security architecture without fear of compromise.”

But the company hasn’t said how it plans to resolve the issue.

The problems aren’t entirely unique to RIM, as its co-CEO Michael Lazaridis tried to argue this week. “Everything on the Internet is encrypted,” he told the Wall Street Journal in an interview Wednesday. “This is not a BlackBerry-only issue. If they can’t deal with the Internet, they should shut it off.”

RIM must now resolve the disputes in a way that doesn’t appear to compromise the security of its service, nor expose it to criticism that it yielded to governments with questionable human rights records.

While RIM has said explicitly said that it won’t compromise its BlackBerry enterprise service, it did not immediately say whether the assurances apply to consumer services delivered through wireless operators. Any compromise at all would be a “slippery slope,” both Gold and Ovum said.