BlackBerry Ltd. today announced that it has appointed John Giamatteo, the president of its cybersecurity business, as Chief Executive Officer.
The software maker announced the leadership change in conjunction with an update to a previously announced restructuring initiative. The initiative was set to see it spin off its internet of things, or IoT, business into a publicly-traded company early next year. BlackBerry disclosed today that the unit’s stock market listing is now off.
Originally known as a handset manufacturer, BlackBerry now focuses mainly on the cybersecurity and IoT software segments. The company says that its products are used by thousands of enterprises worldwide. Last quarter, it generated $132 million in revenue from those customers.
BlackBerry’s cybersecurity unit, which accounts for the bulk of its sales, is based in large part on assets it obtained through the acquisition of a startup called Cylance in 2018. The $1.4 billion deal bought the company a set of tools for protecting employee devices and edge computing systems from cyberattacks. BlackBerry also offers a managed cybersecurity service through which it monitors other companies’ networks for cybersecurity issues on their behalf.
The company’s IoT portfolio, in turn, is headlined by a specialized operating system called QNX. It has been installed in hundreds of millions of cars, industrial robots and other connected systems to date. QNX includes optimizations that make it well-suited to run on IoT devices with limited processing capacity.
An operating system’s core components are packaged into a software module known as the kernel. QNX features a microkernel, a specialized type of kernel that includes less code than the standard variety and consequently requires less hardware to run. That makes it easier to deploy on connected devices with limited computing resources.
QNX also includes a capability known as preemption. Certain programs, such as a car’s automatic emergency braking software, must always complete processing tasks within a specific, narrow time frame. QNX’s preemption feature allows a device to interrupt any non-critical tasks it may be performing to ensure important programs can carry out computations without delays.
BlackBerry’s cybersecurity unit generated $79 million last quarter, down from $111 million a year earlier. Its IoT business, in contrast, grew sales by 9% during the same time frame to $49 million. Moreover, the business achieved that growth while maintaining a 30% higher gross margin than the cybersecurity unit.
BlackBerry, which is currently operating at a loss, launched an initiative called Project Imperium in May to explore “strategic alternatives” for its two core business units. In early October, the software maker announced plans to spin off its IoT unit into a publicly traded company. Long-time BlackBerry CEO John Chen, who took the helm in 2013, stepped down shortly thereafter.
Former Verizon Communications Inc. Chief Technology Officer Richard Lynch became the company’s interim CEO on Nov. 3. Today, BlackBerry appointed John Giamatteo to succeed Lynch as permanent CEO and scraped its plans to take its IoT unit public. Giamatteo is taking up the role following a three-year stint as the president of BlackBerry’s cybersecurity business.
Though the spinoff has been shelved, BlackBerry plans to continue a previously announced effort to separate its cybersecurity and IoT units into “fully standalone divisions”. As part of the move, the company intends to launch a cost reduction effort with the goal of ensuring both units can operate profitability and on a cashflow-positive basis in the future.
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