BlackBerry hails focus on cyber-security

Company sees opportunity to benefit as it transitions to software, COO says

The Trump administration’s focus on cyber-security is “awesome timing” for BlackBerry Ltd. as the hardware-turned-software company tries to make its brand synonymous with secure software instead of smartphones, chief operating officer Marty Beard said Thursday.

In the three years since the Waterloo, Ont., company started to shift from its flailing hardware manufacturing division to focus on security software — a transformation that Beard says is “basically 100 per cent” done — cybersecurity has transformed from a nice-to-have to a must-have feature as regulators and insurance companies worry more about hacks, Beard said in a wide-ranging interview in Toronto as part of a media blitz to clear up confusion over what BlackBerry is actually up to these days.

“As the (U.S.) government focuses more on cyber-security and the president actually created a cybersecurity task force, we obviously would like to be involved in that,” he said.

“For us it’s awesome timing. There’s a real focus in the federal government on getting ahead of this given all the hacks and everything that happened to the government systems.”

Government organizations remain BlackBerry’s strongest vertical given its reputation for secure communications, Beard said.

But BlackBerry is pushing to sell software that helps companies securely manage the proliferation of devices in an organization — be it laptops, smartphones, trucks or wearables — to financial services, health care and transportation companies as well.

Its software lets organizations monitor in real time what people are doing with the hundreds or thousands of devices used in daily operations. One example is BlackBerry Radar, a fleet-management service that reports everything from the temperature of a truck to where it is to whether its door is open.

“Is it Big Brother or Big Protector, it depends on how you look at it. If it’s your stuff in the truck, you probably like it. If you’re the truck driver, maybe not,” Beard said.

Beard said his biggest obstacles isn’t losing deals to other enterprise management software companies, including Microsoft, AirWatch, Citrix and MobileIron — Beard cited BlackBerry as the market leader with a 20 per cent share — but making sure BlackBerry is even invited to the table in the first place.

“One of our biggest challenges is the brand being so primarily associated with smartphones and us as a hardware manufacturer,” he said. “Now we’re a software manufacturer that is selling to enterprises … it’s a big shift.”

There’s even more confusion now that BlackBerry’s new licensing partners have started launching smartphones under its brand name. China’s TCL Communication launched the first of these phones this week, the KEYone — the final device, complete with a keyboard, that BlackBerry had a hand in designing.

Beard emphasized TCL, not BlackBerry, launched the product. BlackBerry has yet to release any financial guidance on how much revenue it expects to earn from these licensing deals.

“We of course make money every time one of those devices are sold, so we hope lots of those devices will be sold,” Beard said.

Still, the bulk of the new BlackBerry is focused on software that helps enterprises manage and secure devices and software embedded into cars through BlackBerry’s QNX division, which has made BlackBerry the leading in-car operating system.

BlackBerry has also increased its focus on autonomous cars, Beard said.

Revenue from software services outstripped hardware for the first time this year, and BlackBerry no longer reports how many devices it sells quarterly.

Beard envisioned a future in which BlackBerry is in a similar position to chipmaker Intel, with stickers stating “BlackBerry Secure” to indicate what’s on the inside of an item the same way Intel advertises on computing devices.

Still, he acknowledged it will take time for people to give up the hardware image.

“I don’t think there’s any magic bullet beyond we have to be really consistent and we just have to keep saying it,” he said. “It’s almost like a political campaign.”