Proving the Business Case for the Internet of Things

Blackberry acquires Cylance for $1.4bn to protect IoT endpoints

Steve Rogerson
November 20, 2018
 
Blackberry is acquiring US software firm Cylance, a specialist in artificial intelligence (AI) and machine learning (ML), for $1.4bn. The company says this will make it the first vendor with a single offering for intelligently protecting and managing fixed and mobile IoT endpoints.
 
Canada-based Blackberry plans on immediately expanding the capabilities across its chip-to-edge portfolio, including QNX, its safety-certified embedded operating system that is deployed in over 120 million vehicles, robot dogs, medical devices and more.
 
Blackberry plans to integrate Cylance technology with its Spark platform, which is at the centre of the company’s strategy to ensure data flowing between endpoints – in a car, business or smart city – is secured, private and trusted.
 
Pending regulatory approvals and other customary closing conditions, the deal is expected to close before the end of Blackberry's current fiscal year in February 2019.
 
“Cylance’s leadership in artificial intelligence and cyber security will immediately complement our entire portfolio, UEM and QNX in particular,” said John Chen, CEO of Blackberry. “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 realising the enterprise of things.”
 
Cylance applies AI, algorithmic science and ML to cyber-security software that has proven effective at predicting and preventing known and unknown threats to fixed endpoints. The company’s lightweight agent resides on the endpoint, operates both online and off, and requires little memory and power to function.
 
Founded in 2012, Cylance generates recurring revenue from more than 3500 active enterprise customers, including more than a fifth of the Fortune 500.
 
“Our highly skilled cyber-security workforce and market leadership in next-generation endpoints will be a perfect fit within Blackberry where our customers, teams and technologies will gain immediate benefits from Blackberry’s global reach,” said Stuart McClure, CEO of Cylance. “We are eager to leverage Blackberry’s mobility and security strengths to adapt our advanced AI technology to deliver a single platform.”
 
Spark is a secure chip-to-edge communications platform for the IoT that will create and leverage trusted connections between any endpoint. Designed for security and industry-specific safety-certifications, such as ISO 26262 in automotive, Spark leverages the company’s technology such as FIPS-validated, app-level, AES 256bit encryption to ensure data are always protected. Spark lets organisations comply with multi-national regulatory requirements. It achieves Common Criteria EAL4+ for iOS and Android.
 
The plan is for Cylance to operate as a separate business unit within Blackberry.
 
Cylance develops AI to deliver prevention-first, predictive security products and smart, simple, secure products that change how organisations approach endpoint security. It provides full spectrum predictive threat prevention and visibility across the enterprise to combat cyber-security attacks. With AI-based malware prevention, threat hunting, automated detection and response, and expert security services, Cylance says it protects the endpoint without increasing staff workload or costs.
 
Perella Weinberg Partners acted as exclusive financial advisor and Morrison Foerster acted as legal advisor to Blackberry. Cylance was advised on the transaction by Morgan Stanley and Jones Day.