Alphabet CFO explains reasoning behind $5.4 billion Mandiant acquisition

144

[ad_1]

Alphabet CFO Ruth Porat

FABRICE COFFRINI | AFP | Getty Images

Alphabet hopes its acquisition of cybersecurity company Mandiant will help it serve the “idiosyncratic” needs of customers in different industries, Alphabet’s finance chief Ruth Porat said at the Morgan Stanley Technology, Media and Telecom conference on Tuesday afternoon.

Google parent company Alphabet announced earlier on Tuesday that it plans to buy cybersecurity firm Mandiant for around $5.4 billion, which makes it the second-largest acquisition in the company’s history. Porat gave a bit a more insight into where it falls within the search giant’s investments in its rapidly growing cloud unit.

“It’s an extraordinary player in cybersecurity,” Porat said of Mandiant. “It is going to enable us to provide this end-to-end solution in this very important area and, again, it goes to our commitment around cybersecurity but also all we’re doing in cloud. The investments and the focus — it starts with let’s make sure we have the depth and breadth within industry verticals so that we can address the idiosyncratic needs within each industry, whether it’s finance versus retail versus health care.”

She added that investments like Mandiant are necessary to compete with the largest cloud players, market leader Amazon Web Services and number-two Microsoft Azure. (Microsoft reportedly bowed out of its own talks to acquire Mandiant earlier this year.)

“The way we look at it (investments) is we’re obviously not competing with our peers at the scale they were then, we are competing at the scale they are now in a market that is accelerating,” Porat said.

“We of course remain focused on what is that longer term path to profitability, but to be really clear, in the near term, we’re continuing to invest to across the board to support cloud.”

In the fourth quarter of 2021, Google Cloud reported year-over-year revenue growth of 45% to $5.54 billion, and its operating loss came in at $890 million, narrower than the $1.14 billion loss a year ago. However, that loss expanded from third quarter, when the unit lost $644 million.

Porat said one of the biggest things cloud customers from both the public and private sectors ask for is artificial intelligence and the ability to automate data. For security, that includes quicker and more sophisticated threat detection, Google Cloud CEO Thomas Kurian said in a blog post Tuesday.

In that earlier blog post, the company said Mandiant would fit in with the company’s products from Chronicle, which began as a standalone company in Alphabet’s “Other Bets” but in 2019 was folded into Google’s cloud business.

“Security operations tools within Google Cloud’s Chronicle, Siemplify solutions and Mandiant’s Automated Defense help customers analyze, prioritize and streamline threat response and leverage Mandiant’s expertise as a virtual extension of their teams,” the blog post said.

Mandiant customers include leading U.S. government agencies, the company said in its most recent annual report. In 2020, for example, FireEye (Mandiant’s name before rebranding) said it was working with the Federal Bureau of Investigation on a cyberattack.

— CNBC tech reporter Jordan Novet contributed to this report.

[ad_2]

Source link