Mandiant is a $5.4 billion bet by Google that security will be a competitive edge in the cloud

Mandiant’s enterprise security detection and response tech will give Google a “full-service” approach to cloud security and could set off a deal-making spree.

Thomas Kurian

“This is an opportunity to deliver an end-to-end security operations suite and extend one of the best consulting organizations in the world,” Google Cloud CEO Thomas Kurian said.

Photo: Michael Short/Bloomberg via Getty Images

Google’s proposed $5.4 billion acquisition of Mandiant will help boost Google Cloud’s security posture as it pushes for more enterprise customers amid an increasingly challenging environment.

Reston, Virginia-based Mandiant, which sells an extended detection and response SaaS platform called Mandiant Advantage, will fill gaps in Google Cloud’s security technology stack that aren’t covered by its own first-party products. Those currently include Google Cloud Armor, its network security service that provides defenses against DDoS and application attacks; Chronicle, its security analytics platform; and BeyondCorp Enterprise, its zero-trust identity and security platform.

“The critical piece for [Google Cloud] is really being able to get closer to feeling like a full-service entity across the whole broad landscape of security tech,” said Miles Ward, chief technology officer for SADA, a business and technology consultancy, in an interview after Google’s announcement.

“Security now is not one category, it's like 20. Google has built some great individual products and bought a couple of others, but Mandiant is just much more full-service. It has a real breadth from across different parts of the technology stack,” he said. “It lets a Google seller and partners like us approach a customer and be able to say that you can get everything that you need effectively from Google at this point.”

Mandiant CEO Kevin Mandia will join Google Cloud in an unspecified role. The company currently has 2,200 employees, including 600 consultants and 300 intelligence analysts who respond to security breaches.

“One of the advantages for the Mandiant setup is that [it] includes advisory services,” Ward said. “They’re there to do a level of consultative support that has been beyond Google professional services until now.”

Cloud computing providers have been doubling down on their security efforts in the wake of mounting and evolving cyberattacks, such as the recent Log4j exploit, ransomware demands, the SolarWinds hack by suspected Russian intelligence attackers and the attacks on Microsoft’s on-premises Exchange Server platform pinned to Chinese nation-state hackers. Cyber threat activity by alleged state-sponsored Russian organizations also has been increasing during Russia’s ongoing invasion of Ukraine.

“The Mandiant brand is synonymous with unmatched insights for organizations seeking to keep themselves secure in a constantly changing environment,” Google Cloud CEO Thomas Kurian said in a statement. “This is an opportunity to deliver an end-to-end security operations suite and extend one of the best consulting organizations in the world.”

The Mandiant acquisition will bolster Google Cloud’s defense in the race with competitors AWS and Microsoft. Bloomberg reported last month that Microsoft had also been pursuing Mandiant. AWS has a worldwide cloud market share of 33% compared to Microsoft’s 21% and Google Cloud’s 10%, according to Synergy Research.

“This deal is all about Mandiant being further integrated into Google Cloud with more cyber threats facing enterprises/governments on the transformational shift to cloud and Mandiant establishing itself as ‘the Navy Seals of cyber security’ over the last decade,” Wedbush Securities analyst Dan Ives wrote in a research note today.

The deal follows Google’s January purchase of Israeli cybersecurity startup Siemplify, a security orchestration, automation and response provider, for a reported $500 million. Google Cloud plans to plug in Siemplify with its other security tooling apparatus later this year.

Google Cloud has boasted that one of its selling points is infrastructure designed from the start with built-in security based on so-called zero-trust principles, rather than security that’s “bolted on,” with its own security chips on its servers and data encrypted by default at rest and in transit. That “security by design” gets pushed up through its products and underpins the services that it runs for customers, according to the cloud provider.

Google’s proposed all-cash acquisition of Mandiant requires regulatory and Mandiant stockholder approvals, and is expected to close later this year. Mandiant, which had been acquired by FireEye in 2013, again became a standalone company last year when FireEye sold its product business and name to Symphony Technology Group under a $1.2 billion deal that closed in October. Mandiant reported $483 million in revenue for the year that ended Dec. 31, 2021, a 21% increase from 2020, and net income of $919 million, following a $207 million loss the prior year.

Its deal with Google is expected to have a major ripple effect across the cybersecurity space as AWS and Microsoft now will be pressured into mergers and acquisition to further bolster their cloud platforms, according to Ives. He cited CyberArk, Ping, Qualys, Rapid7, SailPoint, Tenable and Varonis as possible targets given their focus on cloud workload protection.

“In a massive growth backdrop for cybersecurity and further tailwinds seen during this Ukraine invasion from Russia[n] bad actors/nation-state attacks, we believe today's deal is the tip of the iceberg to a massive phase of consolidation potentially ahead for the cloud space,” Ives said.


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