Is Microsoft About To Acquire Mandiant?

Is Microsoft About To Acquire Mandiant?

Microsoft is rumored to be adding to its suite of cybersecurity products with another purchase, but should investors be taking note?

Reports have emerged that Microsoft (NASDAQ: MSFT) has engaged in talks to acquire American cybersecurity firm Mandiant (NASDAQ: MNDT). The discussion is said to still be in the early stages, and both companies have so far declined to comment.

Mandiant stock has soared by close to 18% as a result of the news, so we decided to take a closer look at the company to determine exactly why Microsoft might be interested.

What does Mandiant do?

Mandiant is a cybersecurity company that specializes in incident response and cyber-intelligence. The firm rose to prominence in early 2013 following its release of a report that directly implicated China in cyber espionage. Later that year, the firm was purchased by FireEye for a fee of $1 billion. However, last year saw Mandiant return to the public market following FireEye selling off much of its products to a consortium, leaving Mandiant to fend for itself.

The company typically investigates major security breaches for large firms. It utilizes advanced research capabilities to identify potential threats and combines this with a rapid incident response service that can offer protection to businesses from unwanted online intrusions.

Why would Microsoft purchase Mandiant?

Investing in cybersecurity would be nothing new for Microsoft. Only last year it purchased two smaller firms to pad out its security arsenal. Through this acquisition, Microsoft could gain extremely valuable information into any system hacks that occur. Considering the already widespread use of Microsoft’s operating system ‘Windows,’ this would only serve to generate even more useable data that Mandiant’s team could use to eliminate threats.

Microsoft software is a common target for high-profile hacks as the threat of cyber-attacks continues to rise each year. Investing in a company like Mandiant would instantly boost Microsoft’s internal security, while also allowing it to build out its security software segment which generated $15 billion in sales for the company in 2021.

What would this mean for investors?

A move such as this would catapult Microsoft into a fantastic position to compete further in the cloud security space. It could easily implement a new set of features into its already extensive cloud network, piling the pressure on competitors such as Google and Amazon to follow suit. 

Its cloud arm is already consistently driving revenue, growing 26% in the past quarter. Adding further security to this will only make it an even more viable option for users. Talks may still only be in the early stages, but completion of an acquisition like this could help Microsoft succeed in its quest for cloud dominance.

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