9 Cybersecurity Firms That Could Be Next Acquired by a Tech Giant
- The cybersecurity market is white-hot and firms are going after bigger acquisitions.
- Tech giants like Google, Amazon, Microsoft, and Cisco want to buy major cybersecurity firms.
- Companies specializing in cloud security and threat detection are especially ripe targets.
Cybersecurity acquisitions are reaching a fever pitch, with tech giants demonstrating that they're willing to shell out unprecedented amounts to gobble up top cloud security firms.
The latest acquisition came this week when Google's parent company Alphabet announced its plan to buy Mandiant for $5.4 billion dollars. The company said it will incorporate Mandiant's human-powered threat detection services and its automated monitoring tools into Google Cloud's existing security products.
Google's decision to buy Mandiant will likely be followed by other major security acquisitions in the months to come, according to analysts.
The deal "illustrates the importance of cyber-security in a cloud-first world," RBC analyst Matthew Hedberg said in an investor note Tuesday. The research firm predicts more mergers ahead that "take advantage of strong market tailwinds."
Other tech giants like Cisco, Microsoft, and Amazon have shown an appetite for major cybersecurity acquisitions in recent years. Cybersecurity spending has surged across the board, driven by new norms of distributed work amid the pandemic and federal regulations instructing organizations to beef up their security.
Organizations have also been warned to buckle in for Russian cyberattacks, and recent breaches like the Log4j security incident demonstrate that hackers continue to find weaknesses in major companies' networks. And as the Russian inv asian of Ukraine continues, some analysts like Wedbush's Dan Ives believe the giants will double down on cloud security to protect cyberspace from a barrage of attacks.
Big companies are especially likely to buy up cybersecurity firms that can strengthen their cloud security offerings, detect sophisticated threats, and handle identity authentication, according to Needham analyst Alex Henderson.
"We're moving towards a cloud platform war in cybersecurity," Henderson told Insider. "Securing the cloud environment is radically different from protecting the traditional enterprise, and these companies are catching up."
Insider rounded up the top companies tech giants are targeting for acquisitions, based on insights from analysts across the market. Valuations of private companies are according to Pitchbook, except where otherwise noted.
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