Did Microsoft Security Growth Drive $5 Billion Google Cloud-Mandiant Deal?

Google Cloud can keep pace with Microsoft in the cybersecurity space through its $5.4 billion acquisition of Mandiant, according to one analyst.

Google on Tuesday announced its intent to acquire Mandiant. The deal, which should close later this year pending approvals, would enhance the Google Cloud security suite with Mandiant’s managed detection and response, attack surface management and threat research services.

Both Google Cloud and Mandiant declined to comment further on the acquisition.

Eric Parizo, principal analyst of Omdia‘s cybersecurity operations intelligence service, said the news surprised him. (Omdia and Channel Futures share a parent company, Informa.) Specifically, it surprised him because reports emerged last month that Microsoft was pursuing Mandiant.

“It has been widely speculated that Microsoft was also close to a deal to acquire Mandiant, so no doubt competitive implications between Microsoft and Alphabet/Google were a driver,” Parizo told Channel Futures.

For example, Parizo said Microsoft’s security business revenue grew 45% year over year, to $15 billion in 2021.

“That’s incredible growth, so no doubt Google’s executives, board members and investors have taken notice and realized enterprise cybersecurity represents a sizable growth opportunity that, so far, they have been missing out on,” Parizo said.

Parizo said Mandiant will help Google Cloud bolster its cybersecurity services portfolio.

Omdia’s Eric Parizo

“In terms of the fit, the Mandiant professional services and incident response business is a prestige purchase but also a great revenue driver, and as a standalone unit could fit into essentially any acquiring business,” he said.

Portfolio Synergies

He called Mandiant’s threat intelligence “unmatched.” In addition, he said Mandiant brings some of the most talented staff to the table.

“On the product side, Google Cloud is one of the few businesses that really didn’t need the Mandiant Advantage platform, which still has some work to do to mature and fully cloud-enable its capabilities,” he said. “Google Cloud’s cybersecurity solutions portfolio is also a work in progress, with the company investing heavily to mature the core capabilities of its Chronicle SIEM both organically and inorganically, most notably with its recent acquisition of SOAR vendor Siemplify. It will take the better part of 2022 for everything to come together.”

Parizo said his ultimate takeaway is that Alphabet intends to make Google Cloud a premiere enterprise cybersecurity company.

“Just last year, Omdia questioned whether the company was serious about cybersecurity. Now, six months and several billion dollars later, there’s no question that Google Cloud intends to rival Microsoft, IBM and other top-tier IT vendors as a premier provider of enterprise cybersecurity products and services,” Parizo said.

I’m not shocked by much, but I’m shocked by this. I bet some people at Microsoft are too. In less than 6 months, Google has gone from also-ran to top-tier powerhouse in cyber solutions & services. We’ll have comments out shortly & a full brief this week. https://t.co/5XIqsCnyF7

— Eric Parizo (@EricParizo) March 8, 2022

Partner Perspective

Google Cloud said on Tuesday that it is “deeply committed to supporting the technology partners of both companies.”

“This acquisition will enable system integrators, resellers and managed security service providers to offer broader solutions to customers,” the company said.

Managed service provider Ensono partners with Google Cloud. Ensono chief technology officer Gordon McKenna said the acquisition gives Google partners a “clear and strategic sign” to enhance their security postures.

Ensono’s Gordon McKenna

“[It’s] another clear sign that cloud providers are making security a top priority. Especially during a time when companies are on high alert for security breaches and foreign threats, Google is smart to add additional end-to-end security capabilities to the platform. Organizations operating in the cloud must continue a zero-trust or high-security model to monitor against potential attacks, and Mandiant’s intelligence will provide that add-on for the GCP platform,” McKenna said.

Increasing Cyber Threats

SoftwareOne’s Jared Cheney

Cloud technology and software specialist SoftwareOne bought Google Cloud service provider Intelligence Partner last year. SoftwareOne vice president of services Jared Cheney said the acquisition announcement responds to a “continued onslaught of security breaches and attacks.” Most recently, cybercriminals reportedly stole source code from Samsung and compromised Nvidia’s internal systems, and security professionals continue to rush to mitigate the Log4j vulnerability.

“As part of three of the largest private cloud providers, including Microsoft and AWS, Google’s decision to join forces with Mandiant is right in line with what companies want and need right now — seamless security solutions for all of their customers,” Cheney said.

Cheney said the movement to ensure security comes after businesses emphasized remote access and availability for their employees during the pandemic.

“Then the focus shifted to optimizing and improving the experience. Now, companies are prioritizing security and ensuring that their remote operations are as secure as possible. Moving forward, we’d expect the combination of both security solutions and major technology companies working together will make a significant impact on the success of businesses and cybersecurity protection campaigns,” Cheney said.