This server relocation makes RIM compliant with the UAE's Telecommunications Regulatory Authority (TRA). The TRA said that they "acknowledged the positive engagement and collaboration of Research In Motion (RIM) in reaching this regulatory compliant outcome." That 'positive engagement' and 'collaboration' were more like 'a rock' and 'a hard place,' forcing RIM's hand.
Had they not come to such an agreement, the UAE would have suspended the BBM, email, and web browsing capabilities of their 500,000 BlackBerry users. RIM has been threatened with service suspensions by Saudi Arabia and India, and has resolved the issues with both nations.
Their original concern with RIM was that BlackBerry information is encrypted and routed through RIM's own servers, denying legal access to other parties like governments. This encryption is part of BlackBerry's corporate appeal. The UAE, however, felt that the privacy of BlackBerry services could be detrimental to national security.