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What's going on?

Google announced on Tuesday that it’s agreed to buy Mandiant, in a major cybersecurity deal that could be key to its future success.

What does this mean?

Google’s been looking for ways to reduce its reliance on advertising – which still makes up the bulk of its revenue – for some time now, and Mandiant could help it do just that: it’s the go-to cyberattack specialist for some of the biggest companies in the world, from Nvidia to News Corp. So the tech giant hasn’t messed about: it’s shaken hands on a deal worth $5.4 billion – around 53% more than the cybersecurity specialist was worth before the announcement. That deal – Google’s second-biggest ever – will allow its cloud business to offer cybersecurity tools to protect its customers, as well as help them respond to threats more quickly. And with the cloud becoming increasingly important in this remote world, those products could be bigger money-spinners than ever.

Why should I care?

Zooming in: This could take a while.
Data from Synergy Research Group shows that Google accounted for 10% of the cloud provider market last quarter – not bad, sure, but nowhere near Microsoft’s 21% and Amazon’s 33%. This deal, then, is a concerted effort to help fix that imbalance. But it isn’t going to happen overnight, with some analysts arguing that it’ll take some time to get this deal past regulators. Google’s nothing if not patient, mind you: its $2.1 billion acquisition of Fitbit took 14 months to get the go-ahead.

The bigger picture: Batten down the virtual hatches.
Some analysts think Google’s deal could be the start of a trend where cloud platforms buy up cybersecurity firms. After all, cyberattacks have become more common in the last few years, and some experts are expecting there to be twice as many by 2025. They will if Russia has anything to say about it: Russian cyberattacks are estimated to have jumped 800% in the first two days of the Ukraine invasion.

Originally posted as part of the Finimize daily email.

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