BlackBerry offloads Cylance’s endpoint security products to Arctic Wolf

BlackBerry’s ambition to mix infosec and the Internet of Things has been squeezed, after the Canadian firm announced it is offloading Cylance’s endpoint security products.

The erstwhile handset champ acquired Cyclance in 2018 for $1.4 billion – at the time its largest-ever acquisition. Then-CEO John Chen hailed the purchase as complementary to BlackBerry’s endpoint management and QNX embedded OS businesses.

“We believe adding Cylance’s capabilities to our trusted advantages in privacy, secure mobility, and embedded systems will make BlackBerry … indispensable to realizing the Enterprise of Things,” he enthused.

It looks like Chen was wrong, as on Tuesday BlackBerry announced it has sold Cylance for $160 million – a substantial loss, and one compounded by the fact that the brand’s overall revenue has gone backwards since the acquisition.

The new owner of Cylance’s endpoint products is Arctic Wolf which, like Cylance, claims to make cyber-defense products potent by infusing them with AI that detects and repels threats. Arctic Wolf will pay $80 million once the deal closes, $40 million around a year later, and chip in 5.5 million shares too.

Arctic Wolf president and CEO Nick Schneider thinks he can cash in on Cylance and deliver “a new era of simplicity, flexibility, and outcomes to the endpoint security market, delivering the security operations results customers have been asking for.”

“Security has an operations and effectiveness problem and endpoint solutions alone have failed to live up to the outcomes they have promised for years,” reads his canned quote about the deal. “By incorporating Cylance’s endpoint security capabilities into our open-XDR Aurora platform, we will be addressing a rampant need for a truly unified, effective security operations that delivers better outcomes for customers. We believe we will be able to rapidly eliminate alert fatigue, reduce total risk exposure, and help customers unlock further value with our warranty and insurability programs.”

Good luck with that, Nick.

BlackBerry CEO John Giamatteo declared himself “incredibly excited to partner with Arctic Wolf through this agreement.”

“We see this transaction as a win-win for our shareholders and all other stakeholders,” he added, before revealing that BlackBerry will continue to resell the combined Cylance/Arctic Wolf portfolio.

News of the offload is a little surprising, as at an October 2024 Investor Day Giamatteo flagged a planned emphasis on managed detection and response services powered by Cylance. That service will still be possible under the new arrangement, and BlackBerry’s status as an Arctic Wolf shareholder may mean it can influence product development to ensure Cylance products meet its needs.

Investors seemed to like the idea, as BlackBerry shares jumped by almost 15 percent on news of the deal. ®

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