Blackberry's acquisition of Cylance means the smartphone pioneer is serious about becoming a purely cybersecurity company

Key Points
  • Blackberry stopped manufacturing phones in-house in 2016 and begin shifting its corporate focus to cybersecurity products, including enterprise platform security software and "internet-of-things" device security. 
  • Cylance is a well-established endpoint protection and antivirus company that has around 100 Fortune 500 clients and 3,500 enterprise clients. 
  • In the $1.4 billion deal will, Cylance will remain a separate business unit within Blackberry. 
John Chen, Executive Chairman and CEO of BlackBerry Ltd, walks on the floor at the New York Stock Exchange (NYSE) in New York, October 16, 2018. 
Brendan McDermid | Reuters

Blackberry's $1.4 billion deal to acquire cybersecurity company Cylance cements the smartphone pioneer's pivot to an exclusive focus on cybersecurity.

The Canadian company has made several other security acquisitions in recent years, but none as large as the Cylance deal announced on Friday. At over $1 billion, the move is a surprisingly large one, indicating the Blackberry will move further away from its devices, which still underpin a number of the company's existing enterprise security deals.

Blackberry has made a rapid transition from a once-ubiquitous corporate smartphone provider, to a niche hardware player — and has become a nearly pure-play cybersecurity firm in less than five years.

Cylance is a well-established cybersecurity firm that provides antivirus, endpoint protection, original equipment manufacturing (OEM) and supply-chain security products. Cylance has around 100 subscriber-clients within the Fortune 500, and 3,500 enterprise clients, according to the statement from Blackberry. The company also has business in state and federal government agencies. Cylance will remain a separate business unit within Blackberry, according to the company.

In recent years, Blackberry has pulled resources away from its smartphone business, halting in-house manufacturing of the keyboard-and-screen handheld in 2016. It then shifted its focus to  enterprise security software, chip-level security products for "endpoints" — including Android and iOS smartphones — and protection for the range of devices that fall into the "internet of things" (IoT). Blackberry has also focused its business on some of the biggest-ticket IoT devices, including connected cars.

The acquisition of Cylance, which has a security consulting business, may also give Blackberry more reach in the area of cybersecurity advisory services. Last year, Blackberry acquired U.K. security consulting firm Encription, in a deal with undisclosed terms.

It's not unusual for a non-security company known for some aspect of cybersecurity to attempt to grow its business in the increasingly lucrative space. However,  Blackberry is one of the first companies to make a sharp and complete turn into a software and consulting cybersecurity business from a hardware background.

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