Mandiant has attracted a second suitor, with Google joining public cloud rival Microsoft in attempting to buy the threat intelligence and incident response superstar.
The move by Mountain View, Calif.-based search giant Google comes as some of its employees have privately discussed the need for more security firepower to compete with Microsoft Azure and Amazon Web Services, The Information reported. Bids for Mandiant were due at the end of February, and the value of a potential deal for the Reston Va.-based firm could not be learned, The Information reported.
Mandiant’s stock skyrocketed $ 3.11 (16.05 percent) to $ 22.49 per share in trading Monday, which is the highest the company’s stock has traded since June 2, 2021. The company now has a valuation of $ 5.26 billion. The Information’s deal report was published 20 minutes before the market closed Monday. Neither Mandiant, Google nor Microsoft immediately responded to CRN requests for comment.
[Related: Microsoft Eyes Mandiant Buy In Threat Intelligence Megadeal: Report]
“Right now Google wants to buy [software] that companies are regularly and repeatedly buying, ”a former Google Cloud manager without knowledge of the Mandiant deal talks told The Information. Google in January purchased Security Orchestration, Automation and Response (SOAR) vendor Siemplify for a reported $ 500 million to help businesses more effectively hunt, detect and respond to threats.
The report of Google’s interest comes a month after Bloomberg indicated that Microsoft was examining the purchase of Mandiant to bolster its products and help protect customers from hacks and breaches. Mandiant in October sold its network, endpoint, and email security product business to Symphony Technology Group (STG) for $ 1.2 billion, meaning the company’s SaaS platform is now an agnostic vendor.
“We run this company like it’s ours forever, and that’s what we’re going to do,” Mandiant CEO Kevin Mandia told CRN on Feb. 8. Mandiant and Microsoft forged a partnership in April 2021, and a quarter of Mandiant’s new managed detection and response (MDR) customers were using Mandiant Managed Defense alongside Microsoft’s Windows Defender endpoint security tool in the second quarter of 2021.
Mandiant’s 2021 revenue jumped to $ 483.5 million, up 21 percent from $ 399.7 million the year prior. The company recorded a net income of $ 918.6 million, or $ 3.81 per diluted share, up from a net loss of $ 207.3 million, or $ 0.95 per diluted share, due to the $ 1.2 billion sale of the FireEye products business. Many of Mandiant’s competitive losses were due to customers not wanting to use FireEye products.
Microsoft has a significantly larger cyber business than Google, with revenue for the Redmond, Wash.-based software vendor’s security business surpassing $ 15 billion over the past 12 months, CEO Satya Nadella disclosed in January. That’s up 45 percent year over year. The firm’s security services integrate more than 50 categories across security, compliance, identity, device management and privacy.
Just last month, Microsoft debuted capabilities to help customers discover, manage, and govern user and workload permissions across Amazon Web Services, Google Cloud Platform, and Microsoft Azure. At $ 15 billion, Microsoft’s cybersecurity business is the largest in the world, and roughly triples the size of Palo Alto Networks, which is the largest vendor in the world selling only security products and services.
Microsoft has long had an advantage in bundling security products with its broader cloud computing services such as storage, computing and productivity apps, a senior manager of a major Microsoft and AWS customer told The Information.
In contrast, Google has not yet broken out its cybersecurity revenue. The company said in January that it plans to integrate Siemplify’s SOAR capability with its Google Chronicle security analytics platform to help organizations modernize and automate their security operations. The Siemplify acquisition marked the first time Google bought an Israeli company active in the cybersecurity sector.
A deal by either Microsoft or Google to buy Mandiant is likely to get a closer look from antitrust regulators, which have become increasingly wary of large tech acquisitions, The Information reported. A Microsoft-Mandiant deal would likely be more intensely probed than a deal involving Google since Microsoft already controls a significant piece of the security software market, The Information reported.
“The odds are pretty good that the [U.S. Department of Justice or Federal Trade Commission] … Will try to come up with a theory for why it should block the deal, ”antitrust defense attorney Doug Ross told The Information. Specifically, Ross anticipated that antitrust authorities would examine whether a deal limits access for competitors or customers of the acquired company.