- Surprise! BlackBerry is no longer a languishing phone company struggling to remain relevant opposite powerhouse consumer hardware manufacturers Apple, Samsung, Google, et al.
- Now a pure software developer with positive revenue numbers, the firm is embarking on an AI-powered journey of trusted and safe communications across a small number of very distinct but highly lucrative markets.
I have always had a soft spot for aging technology. I miss my clear case Apple Newton (stolen) and regret that I can no longer fire up my IBM ThinkPad 701 (the one with the butterfly keyboard). In honor of the 30th anniversary of the Nintendo Game Boy this past week, I even pulled out my Game Boy Pocket (also clear case) for a few rounds of Asteroids and Mortal Kombat II. And even though I never owned a BlackBerry phone, I miss the company’s long-standing dedication to the highly effective but now outdated concept of an actual, qwerty keyboard.
After spending some time with BlackBerry executives this week, I can understand the allure of those little clicky buttons. Most of BlackBerry’s leadership team still rock the classics, it seems. The firm even keeps a sizable storehouse of clicky phones to keep their numerous government contracts equipped with not just clicky but highly secured phones. But alas, those days are truly gone for us and for BlackBerry. After navigating what has been a transitional minefield spanning more than three years, the firm has completely flipped the script, moving from manufacturing hardware to delivering software and services.
The scope of this transition can best be understood with two numbers. Prior to its transformation, the company earned 90% of its revenue from hardware. At present, BlackBerry makes more than 92% of its money from software, predominantly from unified endpoint management, embedded systems, and secure communications. But don’t call BlackBerry a cybersecurity company. As Executive Chairman and CEO John Chen puts it, it’s a security company but it works on things like automotive safety, data transport security, etc. That is, BlackBerry focuses its efforts on a small number of highly specialized use cases across a small set of highly regulated and security-conscious markets, namely finance, government, healthcare, and automotive.
How did BlackBerry go from near extinction to its first quarter of positive growth YoY. Apart from enacting customary austerity measures, BlackBerry made a number of strategic acquisitions focused on deepening and extending its market reach and let’s not forget recurring revenues, new channel partners, and new routes to market. Key purchases of note include WatchDox (data synchronization and sharing), AtHoc (crisis communications), Good Technology (mobile security), and most recently and most notably, Cylance (AI-driven malware and virus detection).
The very recent and pricy ($1.4 billion dollar) acquisition of Cylance is particularly important as it takes a very interesting approach to the rather difficult job of threat prediction and remediation response by eschewing traditional pattern matching methodologies in favor of a predictive, self-learning architecture that’s not just informed by but in fact rooted in AI algorithms and models. Once the acquisition fully settles, BlackBerry intends to inject Cylance technology across its various and diverse product lines, introducing some interesting ideas.
The most interesting of these revolves around the notion that a person’s actions over time can be used to confirm or refute his/her identity. As we’ve all come to expect from AI-informed personal digital sidekicks like Google Assistant, our predictability (e.g., our daily “half double decaffeinated half-caf, with a twist of lemon”) enables Google to suggest that we leave early for our half-calf due to an unforeseen fender bender.
But did you know that this same idea can be applied on a very microscopic scale, say the order in which you open apps first thing in the morning, the way you like to arrange those windows on your desktop, even the way you like to use your mouse. Let’s say you move in either broad or short, choppy strokes (as if you were a T-Rex, as so described by the company). Well, should that pattern change, Cylance would notice the change and issue a security challenge to ensure that you’re still you.
Given that BlackBerry caters almost exclusively to markets that are either highly regulated or highly risk averse (finance and government, for example), this sort of capability may turn out to be a game changer for the vendor. For example, the ability to couple this notion of personae with traditional forms of identity management can greatly lessen potential security risks when a secured device is lost or compromised in some way.
Of course, Cylance’s notion of personae is still forthcoming and not yet mature enough to be considered a true best practice across the vertical industries where it might make the most difference. Will governments and banks come to rely on AI-based identity management much the way enterprise executives came to rely on BlackBerry’s quirky keyboard phones, ushering in a new wave of ‘CrackBerry’ enthusiasm? Only time will tell. But as far as this industry observer is concerned, BlackBerry is already winning, not just in moving from hardware to software, but in doing so while remaining true to its roots as an unorthodox player. Stay quirky, BlackBerry!