Featured Mandiant, Google, And The Future Of Cloud Cybersecurity

Published on September 23rd, 2022 📆 | 4867 Views ⚑

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Mandiant, Google, And The Future Of Cloud Cybersecurity


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Key takeaways

  • Google officially acquired Mandiant on Sept 12, 2022 for $5.4 billion in a move to continue investing in cloud security.
  • Amazon continues to dominate the cloud cybersecurity space, while others attempt to fight for a piece of market share.
  • Cloud cybersecurity has proven to be a business that generates gobs of revenue, enriching Amazon’s profits.

Chances are that you’ve moved all your important documents, photos and other digital files to the cloud. So we can’t ignore the significance of cloud cybersecurity moving forward as we continue to go completely digital in so many aspects of our lives.

Cybersecurity companies are fighting for market share as data breaches and ransomware attacks become more common, more damaging and more expensive. With many companies turning towards cloud technology, it’s no secret that companies like Google, Amazon and Microsoft are going to increase focus on this business sector.

That said, Google’s recent acquisition of the cyber security company, Mandiant, has stirred up a lot of conversation about the future of cloud cybersecurity and the highly competitive landscape therein. We’re going to look at this space to see how much money the big players are making.

Google acquires Mandiant

It was announced on September 12 that Google’s $5.4 billion bid to acquire the cybersecurity firm Mandiant was completed. Mandiant will be joining Google’s cloud computing division so Google can attempt to compete with Amazon’s AWS and Microsoft’s Azure. This is Google’s second-largest acquisition as the company aims to focus on enhancing its security operations suite and advisory services.

With companies worldwide facing cyberattacks, the cloud cybersecurity space is expanding, and fast. With over 17 years of experience, Mandiant is a publicly-traded cybersecurity company that rose to prominence by discovering the SolarWinds attack where 18,000 clients unknowingly downloaded malware. Due to the detection, less than 100 customers ended up getting hacked. The company’s specialization in threat detection is what helped them stand out in the market.

What does this acquisition mean?

Google is investing heavily in its cloud cybersecurity business sector. While Google still has a long way to go to catch up with AWS and Azure, the company is willing to invest its financial resources into growth, even to the detriment of short term profit.

When Google first announced the deal, they brought up how combining Mandiant with Google Cloud’s security offerings will help Cloud customers with increased protection in five key areas:

  1. Advisory services
  2. Threat detection and intelligence
  3. Automation and response tools
  4. Testing and validation
  5. Managed defense

The company is also hopeful that the combination of Google Cloud and Mandiant will encourage further collaboration and innovation in the cybersecurity sector while increasing threat research capabilities. As cyber-attacks become more sophisticated, it’s clear that organizations, governments and individuals need further protection. There’s also significant money to be made in storage as more streaming services emerge.

How much does Google make from Cloud?

We looked at the earnings report for Alphabet, the parent company of Google, to see how much the cloud business brings in. During the Q2 earnings report for 2022, the CEO of Alphabet and Google, Sundar Pichai, declared that performance for the quarter was driven by search and cloud functionality. The company has invested plenty of resources into the AI and computing that’s needed to grow cloud services for businesses of all sizes.

Google brought in $21 billion in revenue from cloud services in 2021, which accounted for 7.5% of the company’s total revenue. However, cloud services still ended up with a net loss of $3.1 billion in 2021.

For the second quarter of 2022, Google Cloud brought in $6.3 billion in revenue, which was a 35% year-over-year increase compared to the second quarter of 2021, when they brought in $4.6 billion in revenue. However, the company also lost $858 million for cloud services in the second quarter of 2022.

Many experts have observed that Google isn’t profitable with its cloud services because they continue to invest in the growth of this sector. Amazon, on the other hand, has remained profitable in its cloud business.

Google executives continue to point to the growth potential of cloud services, highlighting that many companies are still in the early stages of a digital transformation.

How much does Amazon make from AWS?

Amazon Web Services (AWS) had an operating profit of $18.5 billion in 2021. AWS was also 74% of Amazon’s total operating profit in 2021. On an interesting note, AWS contributed 14% to the company’s overall revenue while generating almost three-quarters of the profits.

For the second quarter of 2022, Amazon reported earnings of $19.74 billion in revenue with $5.72 billion in operating income for AWS. The revenue from the cloud services increased 33% during the quarter.

When you take a closer look at the earnings from Amazon, it’s clear that the cloud business is bringing in a majority of the profit, despite the e-commerce side bringing in more revenue. The cloud business simply operates atop higher margins.

AWS is the cloud computing service that provides data storage and networking for regular customers and big enterprise clients like Twitter and Netflix. Netflix uses AWS for almost all of its storage and computing needs. This includes everything from databases to analytics and even video transcoding. Amazon also has many other large companies that rely on AWS, which ensures that this sector will remain profitable.

How much does Microsoft make from Azure?

Microsoft has remained competitive in the cloud cybersecurity space with Azure and other cloud services. According to the company’s earning report for the second quarter in 2022, revenue from Intelligent Cloud was $20.9 billion. Microsoft’s Intelligent Cloud business sector includes Azure (the public cloud for application hosting), SQL Server, Windows Server and enterprise services. They don’t list what revenues they bring in solely from Azure.

Revenue from Azure and cloud services went up by 40% in the last quarter, which is slightly lower than the 46% growth during the previous quarter.

Microsoft also invested in the cloud sector in 2021 with a few major acquisitions. They acquired CloudKnow and ReFirm labs—both major players in cloud security and internet of things (IoT) security, respectively.

What is the future of Cloud Cybersecurity?

The recent acquisitions by Google and Microsoft indicate that these giant companies plan to invest heavily in this business sector. With unprecedented levels of global cyberattacks, there will be more demand for increased cyber security.

Adam Selipsky, the CEO of Amazon’s AWS, recently remarked in an interview that he believes there’s more room to grow in this space since cloud computing is still in its infancy. Selpisky told CNBC’s Jim Cramer, “Essentially, IT is going to move to the cloud. And it’s going to take a while. You’ve seen maybe only, call it 10% of IT today move. So it’s still day 1. It’s still early … Most of it’s still yet to come.”

He also mentioned that despite the steep competition, demand is still increasing for AWS. It will be interesting to observe how Google’s acquisition of Mandiant performs and if this newly expanded business could increase Google’s market share. It’s currently estimated that Amazon has a 39% market share in the cloud cybersecurity space. There’s no telling how many more individuals and corporations are yet to make the complete digital transformation.

It’s also worth mentioning that cybersecurity stocks were a rare bright spot earlier in the year when the stock market tumbled due to global conflict and rising inflation. Companies like Telos and CyberStrike remained strong as cybersecurity threats increased worldwide. This sector remained strong until worries of rising inflation and increasing interest rates led to further sell-offs.

From a business perspective, it’s going to be fascinating to see how Amazon and Microsoft react to Google’s acquisition and if the giants decide to participate in additional mergers or acquisitions as well.

How should you invest in Cloud Cybersecurity?

If you’re looking to invest in cloud technology and cybersecurity, you have many companies to choose from. Cyber security companies will continue to do well as individual users, organizations and governments continue to rely on threat detection for safety. There will also be further demand for cloud storage as streaming services and others continue to put content online.

If you want to invest in tech without the hassle of sifting through hours of research and hype, Q.ai can help you out. With our Emerging Tech Kit, you can take advantage of data-based, AI-backed investment strategies.

Download Q.ai today for access to AI-powered investment strategies. When you deposit $100, we’ll add an additional $100 to your account.

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