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Blackberry Acquires Cylance Artificial Intelligence Cybersecurity Software Business

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Video Update: Top Cylance partner Justin Kallhoff, CEO of Infogressive, shares his experiences working with Cylance, and how he hopes BlackBerry will manage the endpoint security company.

News Background: BlackBerry is acquiring Cylance for $1.4 billion in cash plus various stock incentives for employees at the artificial intelligence endpoint security company. Cylance will operate as a separate business unit within BlackBerry -- which suggests Cylance's partner program and various MSSP and MSP relationships will remain intact, MSSP Alert believes. The deal, announced this morning, is expected to close by February 2019.

BlackBerry Cylance President Stuart McClure
Cylance CEO Stuart McClure

BlackBerry CEO John Chen

BlackBerry acquiring Cylance has been rumored for about a week. BlackBerry had about $2.5 billion in cash on hand ahead of the deal, and has largely repositioned its business around enterprise mobile management and security software. The company exited the handset business after failing to keep pace with Apple iOS and Google Android smartphones.

Cylance, meanwhile, raised $120 million in June 2018, and has been considering an IPO (initial public offering). The company’s fiscal year 2018 revenue was more than $130 million, up 90 percent from the previous fiscal year, Cylance has previously disclosed.

Cylance, founded in 2012, generates highly recurring revenue from over 3,500 active enterprise customers, including more than 20% of the Fortune 500, the company said today. The company has a growing base of MSP and MSSP partners. Recent moves include a ConnectWise integration plus growing deployments at Fujitsu's MSSP unit.

BlackBerry, Cylance CEOs Describe the Deal

Describing the Cylance acquisition, BlackBerry CEO John Chen said:

“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. 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.”

Added Cylance CEO Stuart McClure:

“Our highly skilled 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.”

BlackBerry is expected to host an investor call this morning (Friday, November 16, 2018) to further discuss the deal.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.