When new CEO John Chen took over Blackberry in November last year, he immediately announced that the company will be walking away from the mainstream competition and will instead focus on the government market. First move that he made was sign a five-year deal with Foxconn Technology which will outsource the manufacturing and design of some of its phones.

After less than one month, the company landed one of its major deals, becoming the official mobile phone provider of the United States Department of Defense.

Last week, the Defense Information Systems Agency said in a statement that it has a new mobile program for unclassified work and will predominantly use the Canadian company's smartphones. This program includes around 80,000 BlackBerry units, or 98% of the total mobile devices.

Because of Pentagon's announcement, Blackberry's shares rallied 7% on Tuesday. According to the government agency, it will begin rolling out version 1.0 of the unclassified mobility capability by January's end and will expand capacity to support up to 100,000 users before the conclusion of the fiscal year.

Chen, who is also currently the director of Wells Fargo & Company and Walt Disney Company, is optimistic with his business plan. He believes that Blackberry really belongs to the government niche.

"Many in the regulated industries -- those with the most stringent security needs -- still depend solely on BlackBerry to secure their mobile infrastructure. For governments, BlackBerry cannot just be replaced -- we are the only MDM provider to obtain "Authority to Operate" on US Department of Defense (DoD) networks. This means the DoD is only allowed to use BlackBerry," Chen wrote in a memo on December 30.

"Across the globe, seven out of seven of the G7 governments are also BlackBerry customers."

Blackberry phones have been admired by government agencies for being able to meet high-level security thresholds. According to MIT Technology Review, the company's elliptic curve cryptography is regarded as more efficient than RSA algorithms for small devices. This technology, it said, "will probably become one of the chief ways data is secured worldwide and therefore will continue to increase in value."