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BlackBerry Adds AI, Cybersecurity With Cylance Acquisition

Cylance will operate as a separate business unit within BlackBerry.

Edward Gately

November 17, 2018

3 Min Read
Mergers & Acquisitions

Endpoint security provider Cylance is being purchased by BlackBerry for $1.4 billion in cash plus the assumption of unvested employee incentive awards.

BlackBerry said the acquisition will make it the “first vendor to offer a single solution for intelligently protecting and managing fixed and mobile IoT endpoints.” It plans to immediately expand the capabilities across its “chip-to-edge” portfolio, including QNX, its operating system that is deployed in more than 120 million vehicles, robot dogs, medical devices and more.

After the anticipated close of the transaction early next year, Cylance will operate as a separate business unit within BlackBerry.

Keep up with the latest channel-impacting mergers and acquisitions in our M&A roundup.

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BlackBerry’s John Chen

“Cylance’s leadership in artificial intelligence (AI) and cybersecurity will immediately complement our entire portfolio, UEM and QNX in particular,” said John Chen, BlackBerry’s executive chairman and CEO. “We are very excited to onboard their team and leverage our newly combined expertise. We believe adding Cylance’s capabilities to our trusted advantages in privacy, secure mobility and embedded systems will make BlackBerry Spark indispensable to realizing the enterprise of things (EoT).”

Chris Gonsalves, The 2112 Group’s vice president of research, tells Channel Partners that while the timing of the acquisition was unexpected, the substance of it isn’t all that surprising.

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The 2112 Group’s Chris Gonsalves

“BlackBerry, out of necessity, has had to make a pretty big pivot to something other than their legacy mobile device business, and a big part of that something is their Spark platform for embedded systems,” he said. “Say what you want about their now-museum quality phones, but they were always decent at security and they’ve made some significant promises about the Spark roadmap including advanced threat detection and remediation technologies. Cylance will give them the juice to make good on those promises.”

On the other hand, Gonsalves said a future as the baked-in AI and machine-learning underpinning of BlackBerry’s Spark “probably doesn’t sound so great to Cylance partners, who were doing just fine with Cylance’s highly regarded next-gen endpoint and server protection products, particularly since Cylance is so channel friendly.”

“But there’s a way all parties can win with this deal, at least in the short term,” he said. “Cylance running as a subsidiary of cash-rich BlackBerry can carry on with aggressive innovation of its solutions even as its tech gets integrated into Spark. That arrangement also gives BlackBerry entry into a whole new enterprise market, one that might be receptive to its mobile platform security messaging.”

For now, Cylance partners should see this as…

…a “big endorsement of the vendor’s technology and, hopefully, a harbinger of continued innovation,” Gonsalves said.

Stuart McClure, Cylance’s co-founder, chairman and CEO, said his company’s cybersecurity workforce and market leadership in next-generation endpoint solutions will be a “perfect fit within BlackBerry where our customers, teams and technologies will gain immediate benefits from BlackBerry’s global reach.”

“We are eager to leverage BlackBerry’s mobility and security strengths to adapt our advanced AI technology to deliver a single platform,” he said.

Rik Turner, principal analyst at Ovum, said Cylance was a “phenomenal marketing outfit” that pushed the next-generation endpoint protection story to the maximum, “casting all the ‘old guard’ of endpoint security vendors as passe, much to their chagrin.”

However, Cylance suffered some setbacks, including being labeled as “something of a one-trick pony, that trick being machine learning,” he said.

“Since then Cylance has added an endpoint detection and response (EDR) capability but the feeling has remained that their game was up, so no big surprise that they have been sold,” Turner said. “More surprising is the buyer, but then I no longer follow BlackBerry like I used to. I don’t think of BlackBerry as a heavy hitter in security.”

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About the Author(s)

Edward Gately

Senior News Editor, Channel Futures

As news editor, Edward Gately covers cybersecurity, new channel programs and program changes, M&A and other IT channel trends. Prior to Informa, he spent 26 years as a newspaper journalist in Texas, Louisiana and Arizona.

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