Sidekick fiasco could darken mobile cloud forecast

The nebulous concept of the “mobile cloud” rained on a group of mobile consumers last week as T-Mobile USA Inc.’s Sidekick service experienced a data outage that is now only coming back online, and more significantly may have caused consumers’ stored data to be lost.
Details of the outage are still being investigated, but it appears that the Sidekick’s data servers, which are handled by the device’s software provider Microsoft Corp. subsidiary Danger Inc., went off line sometime last week leaving consumers with no data access from their data-friendly devices. The outage also impacted consumer data stored on the devices that was designed to allow users to have their contact, calendar and messaging information automatically reloaded back to their device should it lose power or if a user were to switch devices. T-Mobile USA was warning customers to not power down their devices or let their batteries run down until the issue is resolved.
While the issue was limited to a couple million Sidekick users, it could sound a thunderous wakeup call for the wireless industry that is increasingly looking to mobile cloud service to increase the capabilities of devices. These services are beyond past efforts that were generally limited to entertainment applications and are looking to be a central depository for all of a customer’s information stored on their mobile device.
A number of companies have offered similar cloud-based services for years, including Research In Motion Ltd.’s Blackberry e-mail service and Apple Inc.’s MobileMe offering with few, if any, issues. However, an increasing number of device manufacturers have recently launched or are planning to launch similar services that in addition to tying a consumer to a certain brand will also place a greater emphasis on that brand taking responsibility for the information that it’s storing.
Palm Inc.’s much heralded WebOS platform relies on exclusively on wireless synchronization of a user’s information with its cloud servers. The same is true for Motorola Inc.’s MotoBlur service that is set to launch exclusively at T-Mobile USA on the Android-powered Motorola Cliq.
Market set to explode
ABI Research recently predicted that mobile cloud computing subscribers worldwide will grow from 42.8 million subscribers in 2008 to nearly 1 billion by 2014, an increase from just over 1% of the worldwide mobile subscriber base to nearly 19%.
While Danger/Microsoft are responsible for the current issue impact Sidekick devices, ABI Senior Analyst Mark Beccue said it’s the carrier that will be impacted.
“When we are looking at it from an industry perspective it’s all about the problem stemming from Microsoft and Danger, but from a consumer perspective it’s all about the carrier,” Beccue explained. “They send their money off to the carrier each month for the service and don’t care who is actually handling the service. To them T-Mobile is responsible.”
Beccue said this could impact the speed at which carriers continue to adopt outsourced offerings.
“Carriers by their very nature are very conservative in rolling out new services because they know they are the consumer face for all of the services they offer,” Beccue said. “I am sure this will just reinforce that nature and for those that move forward with new offerings the issue of redundancy will become even more important.”
T-Mobile USA is looking to soothe angry customers with a free month of Sidekick data service and a $100 service credit. But, you can be sure the carrier will be looking to recoup all of those incentives from Danger/Microsoft.
Focus on servers
Beyond the carrier impact, the Sidekick incident has highlighted the importance of redundancy for the servers powering the mobile services.
“Long term this highlights the requirements for mobile cloud computing,” Beccue said. “You need to have redundancy. They have to build into their business case when they are going to offer cloud computing what’s my backup. It will put a lot of pressure on data centers. I’d be willing to be that a company like Salesforce.com or any one of those companies that they have back up and back up and back up. They are not going to let that kind of thing happen.”
Apple earlier this year signed a deal to invest approximately $1 billion into a new server facility in North Carolina that is expected to power the company’s continued push of cloud-based applications.
The additional costs associated with both the deployment and bolstering of server farms could spell an opportunity for carriers.
“This could result in tiered pricing from carriers,” Beccue said. “The carriers are very good at being sensitive to what customers will pay. They could look at this as an opportunity to offer different pricing models for different levels of backup. I don’t know if that will fly because I would think that consumers are going to expect the carriers to hold onto their information if they are offering a service. It’s almost like a useless offer if a consumer’s info is not safe guarded. But, it’s a possibility.”
Consumer responsibility
Another possible solution was offered by Cellebrite Mobile Synchronization, which provides hardware that allows retail stores to swap customer information between devices as well as cables and software to allow mobile customers to synchronize their device’s information with a personal computer.
“This was obviously some sort of catastrophic failure on the server for Microsoft and that is unfortunate for the customers impacted,” said Adi Ofrat, CEO of Cellebrite. “But, consumers should also take some of the responsibility when it comes to securing their personal information. If they were offered a way by the carriers to synch their data to their own personal computer there would be the necessary redundancy to ensure that whether there is an outage on a server or if a personal computer crashes, the user’s information will be saved in a separate location.”