BlackBerry this week announced a major shakeup in its strategic direction following its "Project Imperium" review. Its board of directors has decided to separate its Internet of Things (IoT) and cybersecurity business units while targeting a subsidiary initial public offering (IPO) for the IoT business next fiscal year.

The board, assisted by Morgan Stanley and Perella Weinberg Partners as financial advisors, initiated a view of BlackBerry's business portfolio to consider various strategic alternatives including the possible separation of one or more of its business units in May.

The latest update confirmed the board has determined the separation “is the optimal strategic direction for BlackBerry.”

"The board and management believe that separating our principal businesses will improve our ability to create value for all our stakeholders,” BlackBerry Executive Chairman and CEO John Chen said in a statement. “Both the IoT and cyber businesses possess leading technology and talent and address vast, expanding market opportunities. This new proposed structure will further enhance their operational agility and concentration on delivering unrivaled solutions to their clientele."

BlackBerry plans to launch the IoT business unit IPO in the first half of the next fiscal year, saying the unit is the market leader for high-performance and safety-critical foundational software in automotive and other verticals.

“BlackBerry believes that a separately-traded IoT subsidiary will enable shareholders to more clearly evaluate the performance and future potential of BlackBerry’s principal businesses on a standalone basis while allowing each business to pursue its own distinct strategy and capital allocation policy,” the company wrote.

The separation decision follows BlackBerry’s transition over the recent years to primarily provide services in security, including managed detection and response (MDR), critical event management, and the IoT.

The vendor made a significant move in 2019 when it acquired Cylance, an endpoint security unicorn, for $1.4 billion. Founded by former McAfee veterans in 2012, Cylance uses artificial intelligence (AI) to offer threat hunting, attack analysis and incident response solutions.

Earlier this summer, Veritas Capital, a private equity firm, was rumored to be considering a potential takeover offer for BlackBerry.

The uncertainty worries the customers, George Kurtz, president and CEO of CrowdStrike, pointed out during its earnings call for the second fiscal quarter of 2024. “They have seen the Cylance BlackBerry movie before, and they’re concerned and uncertainty is never a good thing for a security buyer."

In response to Kurtz's comments, Chen asserted BlackBerry's commitment to its customers in a post on X (also known as Twitter). “Every action BlackBerry takes is because we are committed to our customers – to enabling our customers’ security and success. Our strategy is to further increase our focus on these objectives,” Chen wrote.

“The strength of our cybersecurity innovations and the breadth of our product portfolio mean we are recognized as just one of a few companies well-positioned to marry enterprise cybersecurity solutions with loT platforms – the key to unlocking a $750B convergence market predicted for 2030,” he added.