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Microsoft’s Failed Acquisition of Cyber Threat Intelligence Firm Mandiant and Why It Matters

Rumors circulating in the winter of 2022 suggest that Microsoft got close to acquiring cyber threat intelligence firm Mandiant. The Microsoft Mandiant deal ultimately didn’t happen because Google swooped in and made a massive bid for the company, but the interest these giants had in this acquisition shows how vital cybersecurity is becoming.

Paying attention anytime Microsoft considers pursuing a deal in cybersecurity is essential because it provides insight into the industry’s direction. Microsoft understands the most pressing cyber threats facing businesses of all sizes, so its interest in this threat intelligence firm shows its value. 

Learning about Mandiant and the other cybersecurity firms on Microsoft’s radar can provide a look into the industry’s future. This guide examines the failed Microsoft Mandiant deal, explains Google’s agreement to buy the firm, and explores Microsoft’s recent successful cybersecurity acquisitions. 

What Is Mandiant?

Mandiant is a threat intelligence firm employing a SaaS platform to provide governments, private enterprises, and law enforcement agencies with threat information, automated alert investigations, and security control product validation. The result is early threat detection and rapid response times to prevent and deal with high-profile incidents.

Managed options are available through the Mandiant Advantage platform, and the company uses its Mandiant Intel Grid to provide a dynamic view of potential threats and understand attacker behavior. This cybersecurity software addresses a clear need for many organizations, which is why Microsoft and Google were interested in purchasing it.

A Timeline of the Rumored Microsoft Mandiant Deal

Bids to acquire Mandiant were due at the end of February 2022, and Microsoft’s recent focus on cybersecurity products guaranteed the company would have an interest. Google Cloud is also putting more resources toward cybersecurity. Here’s how everything went down:

Microsoft Considered a Bid

A report from Bloomberg in early February 2022 suggested Microsoft was considering pursuing a deal for Mandiant. It’s unclear if Microsoft made an official offer, but adding Mandiant and its platform to the $15 billion in cybersecurity software sales Microsoft accumulated in 2021 makes sense. Microsoft and Mandiant had also forged a strategic partnership in April 2021, leading to a quarter of Mandiant’s newest managed customers using Windows Defender alongside Mandiant Managed Defense software.

Google Made a Massive Offer

A deal between Microsoft and Mandiant didn’t materialize, likely because Google came through with a significant offer. Google is behind Microsoft in terms of cybersecurity products, so the company made a $5.4 billion offer to acquire Mandiant in an all-cash transaction. The purchase means Google can move forward with improved security offerings and potentially add more cloud technologies in the coming years. 

Microsoft Pivoted to Other Products

Microsoft isn’t giving up on expanding its cybersecurity footprint and almost immediately acquired other firms. These moves show how serious Microsoft is about remaining a significant player in the cybersecurity industry. Its interest is something startups and their investors should monitor as they grow in the market.

The Microsoft Mandiant deal didn’t happen, but the company sold to Google for $5.4 billion nonetheless. The cybersecurity industry is going mainstream, and startups and investors should understand the potential for growth moving forward.

Five Cybersecurity Firms Microsoft Has Successfully Acquired

Microsoft’s willingness to pivot and acquire other cybersecurity firms shows a favorable forecast for the industry in the coming years. It also bought some cybersecurity organizations in the months and years leading up to the rumored Mandiant deal. Some companies Microsoft has already purchased include:

1. CyberX

The acquisition of CyberX cost Microsoft around $165 million in June 2020 but allowed them to improve their Azure IoT security capabilities. CyberX was a startup focusing on predicting, detecting, and stopping breaches on IoT networks by leveraging AI technologies, helping Microsoft provide security to large industrial organizations. Microsoft has invested over $5 billion in IoT solutions, so purchasing a firm already offering protection in that field made a lot of sense.

2. ReFirm Labs

Microsoft’s acquisition of ReFirm Labs was finalized in June 2021 and was another move to enhance its IoT security offerings. ReFirm Labs is a firmware security-analysis vendor that supplied its Binwalk open-source technology to over half a million customers globally and was founded by one-time U.S. National Security Agency hackers. This technology looks to find holes in IoT security products before cyber criminals do, providing a valuable service for businesses.

3. RiskIQ

Microsoft acquired threat intelligence and attack surface management firm RiskIQ in the summer of 2021 for more than $500 million. This purchase allows Microsoft to add RiskIQ technology to its Defender Threat Intelligence and Defender External Attack Surface Management platforms, offering better service to customers.

4. CloudKnox Security

CloudKnox was a startup offering cloud infrastructure management security when Microsoft acquired the firm in July 2021. The company started in 2016 and quickly raised $22.8 million from notable investors before Microsoft took notice. Microsoft didn’t release the terms of the deal.

5. Miburo

Acquiring cyber threat analysis and research company Miburo in June 2022 helped Microsoft add to its impressive cybersecurity offerings. Miburo specializes in detecting and responding to foreign information operations, which is becoming essential as more foreign governments attempt to infiltrate American business processes. Microsoft didn’t disclose the purchase price of this acquisition. 

Microsoft’s willingness to spend significant money buying startups offering the solutions it needs to improve its current product lineup should be eye-opening for founders with viable services and the investors supporting them. Marketing your product could be enough to get Microsoft’s attention as it continues growing its cybersecurity empire.

Bringing Startups and Investors Together

Startups need investors to get their cybersecurity products off the ground, especially if they’re looking to sell their solutions to corporations like Microsoft in the future. This funding is vital for product development and marketing, and it brings value to investors when the software generates sales or makes an acquisition viable.

Option3 brings investors and startups together. We have significant cybersecurity industry knowledge and understand what American firms need from their security products, helping us back suitable projects and deliver strong returns. Contact Option3 to learn more about our cybersecurity investment portfolios.


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