BlackBerry Buys Encription, Blackberry's Pivot

TechCrunch

BlackBerry Buys UK’s Encription To Kickstart A New Cybersecurity Consultancy - BlackBerry is not the smartphone powerhouse it used to be, but it’s been making a concerted effort to hold on to its position as a go-to place for enterprise customers, specifically in highly secure environments. As part of that strategy, today the company announced that it has acquired Encription Ltd, a cybersecurity consultancy that delivers services globally but operates “from a secure location in Worcestershire” in the UK. BlackBerry says will be using the acquisition to help it kickstart a new consulting business, Professional Cybersecurity Services.

Building out its services business could also help set BlackBerry up for a future where it may even work with businesses on more general IT, cutting out the question of a BlackBerry smartphone business altogether.

Terms of the deal, which BlackBerry says was completed February 19, were not disclosed. It does not appear that Encription ever raised venture funding.

BlackBerry is launching Professional Cybersecurity Services, it seems, for two primary reasons.

The first is that BlackBerry still has customers in segments like the government and other secure organizations like financial services, healthcare and the oil industry. And while the smartphone maker has lost out to Android makers like Samsung’s Knox, and Apple’s iPhone among many business customers, the government and organizations with high regulatory compliance are part of a category where BlackBerry remains relatively strong.

BlackBerry says it has some 70 government certifications and approvals, the largest amount of any other mobile vendor, with contracts with all G7 governments, 16 of the G20 governments, 10 out of 10 of the largest global banks and law firms, and the top five largest managed healthcare, investment services, and oil and gas companies.

For now, these ties are based around its own BlackBerry handsets, but tying itself deeper into the services that run both on BlackBerry phones as well as other devices means that BlackBerry can bid for business regardless what handset gets adopted.

And it’s no coincidence that this is also a segment where Encription also has many customers.

“BlackBerry is the gold standard when it comes to security and we’re always evolving to maintain this high standard as the complexity of enterprise mobility and security increases,” said John Chen, Executive Chairman and CEO, BlackBerry, in a statement announcing the acquisition and new consultancy practice. “We recognize that security vulnerabilities are a top risk concern for public and private sector organizations alike. The creation of our Professional Cybersecurity Services practice and acquisition of Encription reinforces our commitment to providing customers the industry’s most secure mobility solutions and helping them to assess and mitigate risks.”

The other reason why BlackBerry is focusing on consulting is that this is a huge business area, and BlackBerry really needs more of these.

While data security breaches can cost more than $400 billion to businesses, individuals and organizations annually, that also represents an opportunity to companies that are trying to stop those threats.

BlackBerry notes that cybersecurity consulting “is currently estimated to be a $16.5 billion annual global business that is forecast to grow to $23 billion per annum by 2019…Cybersecurity consulting represents a natural market opportunity for BlackBerry since it already securely manages hundreds of millions of mobile endpoints and provides critical systems software for more than 60 million connected cars.”

It will mean that BlackBerry will also be going head to head with a number of very established firms like Accenture and Cap Gemini in the consultancy space — which in the past had potentially also been a partner for the company.

BlackBerry says it will cover several areas in its new consultancy practice:

Strategic Security: best practices in IT operation ranging across enterprise mobility management and cloud services.
Technical Security: technical assistance for infrastructure and product development lifecycle.
Automotive and IoT Security: security consulting services as the rapid commercialization of IoT solutions makes security and privacy a top priority.
Detection, Testing and Analysis: threat detection and mitigation penetration testing, vulnerability assessment and incident response analysis. This includes forensic services, business security status via IT health checks, training, regulatory compliance and security breach management through incident response.

BlackBerry has made 29 acquisitions to date, including several in the security space such as Watchdox in 2015 for up to $150 million, Secusmart for voice encryption, and Good Technology (which covers security as part of its mobile device management services). Encription is the first that focuses less on tech and more on a services team that helps implement and manage larger solutions.