BlackBerry Makes Another Bet on Services

The acquisition of U.K. consultancy Encription will add to BlackBerry's cybersecurity business as it continues to pivot away from smartphones.
Katie Kuehner-HebertFebruary 24, 2016

BlackBerry has made another move into the services business by acquiring Encription, a U.K.-based cybersecurity consultancy.

BlackBerry will be using the acquisition to help launch a new consulting business, Professional Cybersecurity Services. Terms of the deal were not disclosed.

“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,” the Canadian smartphone maker said in a news release.

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According to Gartner, cybersecurity consulting is expected to grow from a $16.5 billion annual global business to $23 billion by 2019.

BlackBerry has made a series of deals over the past year as it pivots to software and consulting services in the face of waning sales for its phones. Its acquisitions have included AtHoc, a provider of secure, networked crisis communications, and security software maker Good Technology.

“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,” TechCrunch said.

Encription employs about 40 cybersecurity experts, who have helped test network vulnerabilities for both government agencies and large corporate entities. It has mimicked the techniques of malicious hackers to ensure organizations are aware of cyber risks posed by criminal hackers and know how to address them.

“This is a natural extension of what we do right now,” James Mackey, BlackBerry’s head of corporate development, told Reuters. “We’re very excited about this new offering and we think it is highly complementary and a nice addition to our security portfolio.”

TechCrunch suggested that 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.”