SAN RAMON, CALIFORNIA — BlackBerry Ltd.’s purchase of Cylance Inc. for US$1.4 billion in November wasn’t exactly a blockbuster deal in the tech industry, where the big boys post billions of dollars in quarterly profits, and A-list IPOs are valued in the tens of billions.Heck, the deal wasn’t even the biggest cybersecurity acquisition of 2018: Cisco Systems Inc. bought Duo Security Inc. for US$2.8 billion just a few months earlier.But make no mistake, Cylance was a big deal for BlackBerry. For one thing, it was the biggest acquisition in the company’s history, and buying the Irvine, Calif.-based cybersecurity company made a strong statement about where BlackBerry is at today.BlackBerry bought a cybersecurity company because these days, BlackBerry is a cybersecurity company.And when the deal closed in February, BlackBerry paid cash. BlackBerry timeline: From rags to riches to rags to … BlackBerry gets $40M boost from Ottawa to build primary operating system for connected vehicles ‘I’ve been wrong, but this feels right’: BlackBerry CEO’s bet on security pays off in privacy scandal age “We didn’t have to borrow a dime. We just sat down and wrote a cheque for $1.4 billion,” chief executive John Chen said during an extensive interview with the Financial Post from BlackBerry’s San Ramon, Calif., office, where Chen is based.“The fact that we were able to write a cash cheque for $1.4 billion — that’s not a trivial amount of money — to buy a company, all cash, should tell everybody that the turnaround is definitely more than over.”In some ways, the deal is the culmination of the business strategy put in place by Chen when he took over in 2013, a time when BlackBerry’s future was very much in doubt and the company was in desperate need of a “turnaround artist” at the helm — an artist who clearly feels like he’s succeeded to this point.The all-cash deal is a point of pride for Chen. In public appearances since the deal was announced, he has said BlackBerry probably owed people $2 billion with no ability to pay it when he became CEO.BlackBerry CEO John Chen at the company’s California offices. For 15 years after its founding, the company wandered in relative obscurity, dabbling in various technologies and experimenting with wireless data systems until the company hit a grand slam with the BlackBerry pager in 1999.What followed was a classic rags-to-riches-to-rags tale, as Apple Inc., Google LLC and other global behemoths took over the smartphone market, forcing BlackBerry to call in a turnaround expert, John Chen.Chen has drastically reduced the company’s size and changed its course. BlackBerry’s revenue now comes almost entirely from software, services and licencing intellectual property. In December, while releasing Q3 financial results, BlackBerry reported no revenue from the sale of handset devices for the first time this century.There’s still a BlackBerry-branded device on the market — the BlackBerry Key2 — but the company licenses its brand to TCL Communication Technology Holdings Ltd., a Chinese manufacturing company.BlackBerry Key2 is displayed at the Mobile World Congress (MWC) in Barcelona on February 27, 2019. These days, they’ve got some walking-around money.“Next year, especially together with Cylance, our software revenue will top over $1 billion,” Chen said. “There are not too many security companies at $1-billion revenue. We make money.”That’s a big change from just a few years ago when, if you were being unkind, BlackBerry wasn’t much more than a basket of parts: old patents, brands and products left over from the company’s high-flying days after it invented the global smartphone market.Today, BlackBerry executives would have you believe the company is drawing on years of secure communications expertise to position itself as a global cybersecurity leader in a burgeoning new market.“We’re not a basket of parts,” said chief technology officer Charles Eagan. “We’re a bunch of ninjas that are preparing to fight the war that’s coming.”To buy a company, all cash, should tell everybody that the turnaround is definitely more than overJohn Chen, BlackBerry CEO QNX has been one of the bright lights for BlackBerry during its transition over the past few years. The QNX operating system, acquired by BlackBerry in 2010 as part of a failed strategy to reinvent the smartphone, has become a successful operating system for automotive infotainment systems.More than 120 million cars on the road now use BlackBerry QNX software, and the project that Chen and Trudeau announced last month aims to expand the operating system so that it becomes a secure platform for future cars, with a wave of highly computerized, highly connected vehicles entering into the market — not to mention fully autonomous, computer-driven cars looming just over the horizon.“It’s gotta be rock solid, and we’re the best in the world at it,” said John Wall, a senior vice-president at BlackBerry and head of the QNX division.“Our play in it is to be that safe, secure, robust foundation, and the advantage that we have here is that we’re not competing with our customers. If I’m Mercedes, I want to develop features that look like Mercedes. I don’t care about the plumbing.”But QNX is for more than just cars. It can be an embedded operating system for all sorts of things that have computers inside them, though they may not look like computers.“It’s used everywhere. It’s used in washing machines. We have robotic vacuum machines that use QNX,” Wall said. “The lights in Ottawa — the traffic lights — are all QNX. When you do a Visa transaction, QNX is involved in that Visa transaction. The space station is using QNX.”Wall said even the Russian military pervasively — and illegally — uses QNX in its equipment.QNX signage at the Ottawa headquarters. If QNX is the secure, solid operating system that will run on just about anything, and Spark is to be the secure communications system that will connect IoT devices, Cylance’s AI threat detection is what will make those secure systems smarter and more proactive in handling cyber attacks.Cylance was one of the pioneers in building artificial intelligence threat detection systems, using machine learning to find patterns of malicious behaviour and block attacks before they happen.“I’m building an engineering team, actually based out of Ottawa … that will help port some of the Cylance technology over onto to our endpoint management solutions, our enterprise solution (Unified Endpoint Management), as well as on QNX to kind of provide the next generation of safety on the car,” Chen said.The cars are part of Chen’s strategy, but it goes well beyond that.In his presentation announcing Spark, Chen said BlackBerry expects 75 billion connected devices by 2025 — medical equipment, industrial systems, transport systems and consumer products of all kinds — and it wants to be the secure, trusted software provider holding all these devices together.For example, BlackBerry last fall announced a smart cities security certificate product, signalling that the company is interested in IoT for urban data systems. The blockchain health-care project it’s working on signals it’s ready to dabble in the medical sector. It also has a product called Radar, an internet-connected device for tracking shipping containers, which gives BlackBerry a presence in the transportation sector.In a way, BlackBerry now looks a little bit like it did in the early years of Research In Motion, when the company was wandering in search of a hit product while dabbling in all sorts of different wireless data technologies before finding success with the BlackBerry pager, with its email capabilities and iconic physical keyboard.But Chen rejects the idea that they’re dabbling in search of a hit.“We are going to make $1 billion in software that’s related to security, okay? If you call that wandering around, okay, I wander around with $1 billion,” he said, with a smile.“I would say that we’re more waiting than wandering. We know that this hit in IoT communication is real. I mean, the needs are there. There’s no turning back.”BlackBerry CEO John Chen has drastically reduced the company’s size and changed its course. For BlackBerry to succeed, Goodness said it will need to partner with consulting companies such as Accenture or Cognizant to bring them in on large IoT projects.On the plus side, as Chen points out, BlackBerry is in the black. It has revenue coming in and money in the bank. The one thing it might continue to lose is consumer visibility.Building the connective tissue behind the scenes, deep in the guts of connected cars and smart speakers might be lucrative, but it’s unlikely that Barack Obama and Oprah Winfrey will be raving about BlackBerry software like they did about its devices.Former U.S. president Barack Obama with his BlackBerry in 2014. Michael Short for National Post Eagan said BlackBerry’s long history of working on secure mobile communications gives it an edge as it repositions itself as a cyberscurity company since security is embedded in the DNA of the company, which on March 7 celebrates its 35th anniversary.Mike Lazaridis and Doug Fregin in 1984 founded BlackBerry, née Research In Motion Ltd., in office space above a bagel shop in Waterloo, Ont., and the anniversary caps off a busy six months that serve something as a corporate inflection point.A BlackBerry pager in 2003. Although BlackBerry does not make the device, Chen still uses it as his personal smartphone, but he’s publicly said he turns off the GPS because he doesn’t want to share his location information.With that in mind, Chen’s personality perhaps better fits in with the careful suspiciousness of a stereotypical cybersecurity CEO than an enthusiastic, gadget-pushing smartphone manufacturer exec.In practice, he and BlackBerry have already made the transition to software and services.The Cylance acquisition, with its big price tag, was BlackBerry’s most eye-catching announcement recently, but it was just the cherry on top of a busy period for the company, which kicked off in September when BlackBerry first announced something called Spark.Though details about Spark are still a little vague, it’s being billed as a secure communications platform for connected devices, that is, the Internet of Things (IoT).“The strategy of this is to become the standard secure communication platform for IoT for all endpoints. That’s the dream that we have, and we’re applying everything in here,” Chen said, describing Spark at the BlackBerry Security Summit in New York in October. “In here is all the embedded technology that we know, all the secure technology that we know, and we’re taking it to the next level.”Spark hasn’t been released yet, but Chen in October said it will probably be ready for the market “within the next 12 months or so.” In the meantime, the company has announced a trial project to integrate Spark with blockchain health-care technology involving sensitive records for children with rare diseases. Chen also announced the company is working with Amazon.com Inc.’s Alexa smart speaker platform to do something with Spark.“We’re very excited to be able to sit down and work with Amazon on how to bridge enterprise to consumer,” he said at the New York event.Fast-forward to February and Chen was in Ottawa alongside Prime Minister Justin Trudeau to announce a $310.5-million project to expand the BlackBerry QNX operating system, with the federal government kicking in $40 million, based on a commitment that the company will create 800 new jobs.Prime Minister Justin Trudeau and John Chen before a press conference in February. Michael Short for National Post Norm Betts/Bloomberg files Josep Lago/AFP/Getty Images Yuri Gripas/AFP/Getty Images files Chen clearly still holds some nostalgia for the glory days, and fondly remembers wearing an original BlackBerry pager on his hip — a status symbol in its day — but said the BlackBerry name still holds enough cachet to help him get meetings.“The power of the brand is that virtually anybody that I’d like to meet — in business and in politics — has been a customer,” he said.But he admits the company’s future business strategy is not likely going to be seen as cool as it was in the past. Maybe one day people will take comfort in a logo on their car that says “BlackBerry Secured,” but Obama won’t be talking about it on the Tonight Show with Jimmy Fallon.“What you’re referring to is whether you’re a consumer company or an enterprise company. Coca-Cola is cool. But the people who provide the bottles to Coca-Cola, nobody cares — although they’re probably very successful,” Chen said.“Well, for today, that’s where we need to be.”Financial Post• Email: firstname.lastname@example.org | Twitter: David Kawai/Bloomberg David Kawai/Bloomberg But if Chen makes it sound like an inevitability, Eric Goodness, an analyst at global research firm Gartner Inc. focusing on IoT, is a lot more skeptical about BlackBerry’s chances.“I think it’s a strategy being pursued by hundreds upon hundreds upon hundreds upon hundreds upon hundreds of other companies,” he said. “It is a gold rush, no doubt about it.”Moreover, Goodness said the IoT transformation is still very much in the early innings, and the marketplace is crowded with all sorts of different players trying different strategies to own a share of the market.Some IoT device makers are writing their own software to create a closed ecosystem and won’t necessarily want what BlackBerry is offering. And some telcos and network providers are trying to assert their own dominance, too.Goodness said BlackBerry indisputably has a gold-standard legacy for secure digital communications, but nearly every service provider claims its platform is ultra-secure, whether it actually is or not.“From a market perspective, I just don’t see BlackBerry out there very aggressively positioning themselves as an IoT leader. I just don’t,” he said. “And in the IoT marketplace, visibility is everything.”Goodness said he doesn’t hear major players in the industry talking about BlackBerry very often.“We should be hearing Verizon and AT&T and Sprint and Vodafone and Telefonica and Telstra talking about BlackBerry as being part of their portfolio,” he said. “None of those companies talk about BlackBerry.”From a market perspective, I just don’t see BlackBerry out there very aggressively positioning themselves as an IoT leader. I just don’tEric Goodness, analyst, Gartner Inc.
Addressing a leading forum on development in Brussels, known as European Development Days, Ms. Mohammed said that the joint Spotlight Initiative was a key element for making Global Goal 5 on women’s empowerment, of the 2030 Sustainable Development Agenda, a reality.Now in the third year of working towards the Sustainable Development Goals (SDGs), the forum this year is shining a spotlight on gender equality.“Without equality and empowerment, we will simply perpetuate today’s paradigm: trying to address all the world’s challenges with only half the world’s assets,” said UN Deputy Secretary-General Amina Mohammed in her opening remarks.She painted a picture of women not fully included in decision-making, being subjected to a “global pandemic” of violence against women and girls.“Attacks and discrimination are deeply embedded in social norms, attitudes and practices,” she asserted. “Addressing these mindsets will require significant investments of time, resources and political will.”The UN deputy chief cited the World Bank in detailing how women’s equal participation in the labor force had the potential to unlock $160 trillion for sustainable development reinvestment.Without equality and empowerment, we will simply perpetuate today’s paradigm — UN deputy chief, Amina Mohammed“Yet a stark reality prevails: more women than men live in extreme poverty,” she continued, adding that the worldwide pay gap stands at 23 per cent, and gender roles have been too slow to change.Ms. Mohammed pointed to the benefit of reaching SDG 5 — for the more than 190 countries around the world who signed up to the Goals in 2015 — which calls for gender equality and women’s empowerment.“I often call it the ‘docking station’ for all the goals,” she said, flagging that Spotlight builds on civil society leadership and aims to address some of the imbalances women face.Noting that worldwide, almost one-in-two women murdered are killed by a partner or ex-partner, she said that in some countries, “Spotlight will focus on the most extreme form of violence – femicide.”“Often,” she continued, “in the wake of these murders, we find that women have indeed reported to the police, or sought medical care. But service providers did not have adequate information or the means to identify the risk.” Some of the violence takes place due to the broader insecurity that women face, particularly where they are advocating for women’s rights.Ms Mohammed also underscored the UN’s commitment to lead by example by empowering women within the Organization itself, working towards – for the first time in UN history – full gender parity in the Senior Management Group and among those nominated to be Resident Coordinators, the UN’s team leaders on the ground. “We have a long way to go. But we have a plan and we have the will,” she stressed.