Aiming to beef up Internet of Things security, Ontario-based Blackberry inked a $1.4 billion all-cash deal to acquire Cylance, one of the leaders in applying artificial intelligence to security software.
The deal, which was announced in the middle of November, is the latest in a string of mega software buys this year aimed at enhancing cybersecurity and software as a service offerings for technology players. In the early part of November, IBM announced a $34 billion acquisition of RedHat while Microsoft acquired GitHub in June for $7.5 billion, to name a couple. It also marks Blackberry’s largest acquisition to date, accounting for more than half of its $2.26 billion in cash and short-term investments.
In announcing the deal with Cylance, Blackberry said its technology will complement its entire product line and help it realize its vision of Enterprise of Things, which enables businesses to securely transmit sensitive data between endpoints. The way BlackBerry sees it IoT is emerging as one of the most important developments with ten million “new things” added daily. But it's not just connecting people and devices, behind the scenes it's also transforming how enterprises develop, market, distribute and sell products. But in order for companies to get comfortable with this shift they have to feel confident that the systems are secure. That is where Cylance comes in. BlackBerry noted in the press release announcing the deal that cybersecurity is cited as a top challenge among businesses when it comes to IoT success.
“Cylance’s leadership in artificial intelligence and cybersecurity will immediately complement our entire portfolio, UEM and QNX in particular. We are very excited to onboard their team and leverage our newly combined expertise,” said John Chen, Executive Chairman and CEO of BlackBerry in the announcement release. “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.”
According to BlackBerry Cylance is a pioneer in applying AI, algorithmic science and machine learning to cyber security software and has proven effective in predicting and preventing known and unknown threats to fixed endpoints. Its products reside on the endpoint, requiring minimum memory and power to operate. Cylance has over 3,500 active enterprise customers with more than 20% of which are Fortune 500 enterprises. Cylance will operate as a stand-alone business unit once the deal is closed.
The acquisition of Cylance on the part of Blackberry meshes with the company’s strategy under the helm of Chen who over the years has been shifting the company’s focus from mobile phones to enterprise software and services. In 2015 it acquired Good Technology, its rival, for $425 million to push further into the mobile security software market. Long gone are the days when Blackberry was synonymous with its handheld devices that were so addicting it was famously dubbed “crackberries.”