The U.S. Department of Justice has approved Google’s $5.4 billion acquisition of cybersecurity firm Mandiant — the second-largest acquisition in Google’s history, after its $12.5 billion acquisition of Motorola in 2011. Mobile phone division Mobility. Google’s third-biggest acquisition was Nest, a maker of smart home products, for $3.2 billion in 2014.
According to Google, company management expects to fully close the deal by the end of the year, when Mandiant will be included in the security portfolio of Google’s cloud business.
On March 8 this year, Google announced that it would acquire Mandiant, a cybersecurity company, for $23 per share in cash, for a total transaction value of about $5.4 billion, including Mandiant’s net cash. Before Google’s official announcement, there were various reports on the Internet. After The Information reported that Google intends to acquire Mandiant, Mandiant’s stock price rose as much as 16%.
Mandiant is a well-known threat intelligence company in the field of network security. It released the technical details of the SolarWinds supply chain attack for the first time.
According to reports, Mandiant’s own business has a distinct US military background. Its founder, Kevin Mandia, is from the US Department of Defense, and many employees also come from the US intelligence community.
In 2013, after Mandiant was acquired by the top cybersecurity company FireEye for $1 billion, it penetrated the TOG market more deeply. Google’s acquisition of Mandiant may bring a wealth of U.S. government orders to it in the future.
Currently, Google Cloud, Amazon AWS and Microsoft Azure are the top three public cloud players in the world. However, although Google, a search company, ranks third in the cloud computing market, there is a clear gap between it and the top two.
As early as 2017, Diane Green, head of Google’s cloud division, put forward a vision: to surpass the cloud computing market leader AWS cloud by July 31, 2022.
So far, this goal has not only not been achieved, but Diane Greene has also left in 2018.
In December 2019, Thomas Kurian, who resigned as president of product development from Oracle and took over the operational key of Google Cloud from Diane Greene, made a five-year plan for Google Cloud: “The goal of Google Cloud is to To be at least the second largest cloud, and to be the second largest in the world, means we have to move beyond Microsoft Azure and close the gap with market leader Amazon AWS.”
Now, almost three years have passed, and Kurian’s goal has not been achieved.
According to data recently released by Synergy Research Group, global enterprise spending on cloud infrastructure services reached $54.7 billion (368.9 billion yuan) in the second quarter of 2022, a year-on-year increase of 29%.
As of the second quarter of 2022, AWS is the global leader in cloud infrastructure services revenue with a 34% global market share. Microsoft Azure has a 21% cloud market share, and Google Cloud ranks third in the market with a 10% share.
In addition to the three giants, Alibaba Cloud has a 5% share, IBM and Kyndryl have a 4% share, Salesforce has a 3% share, Tencent has a 3% share, and Oracle has a 2% market share.
While market share fell short of expectations, Google Cloud has long been seen as Google’s second growth curve.
On July 27th, according to foreign media reports, on Tuesday, local time, Google parent company Alphabet announced its financial results for the second quarter of 2022 as of June 30th. The company’s second-quarter revenue was $69.7 billion, up 13% from a year earlier, but below Wall Street’s estimate of $70.35 billion, the earnings report showed.
It is worth noting that compared with the 62% year-on-year growth in the second quarter of 2021, this year’s 13% growth is insignificant, and even hit the lowest year-on-year growth rate since the end of 2020.
Alphabet and Google CEO Sundar Pichai said the search and cloud businesses once again drove the company’s bottom line. According to the financial report, in the second quarter, revenue from search and other businesses was US$40.7 billion, a year-on-year increase of 13.7%; YouTube advertising revenue was US$7.34 billion, a year-on-year increase of 4.8%; Google Network revenue was US$8.26 billion, a year-on-year increase. 8.7%; Google Cloud’s revenue was $6.28 billion, a year-on-year increase of 36.52% compared to $4.6 billion in the same period last year.
But this quarter, Google Cloud’s operating profit continued to explode, with a loss of $858 million, 45% higher than last year’s loss of $591 million.
In contrast, Google Cloud’s biggest competitors, Amazon and Microsoft, have operating profit margins of more than 20%. According to Microsoft’s financial report released on the same day, revenue from Azure and other cloud services increased by 40% year-on-year in the second quarter.
However, Google, which is inspired to become the second largest cloud, has been actively investing heavily in cloud computing business in recent years, in order to win in the field of cloud computing, but it has never conducted large-scale transactions and acquisitions.
In two of the biggest acquisitions of 2018 — IBM’s $34 billion purchase of Red Hat and Microsoft’s $7.5 billion purchase of GitHub — Google negotiated, but failed to reach a deal.
Missing out on a great acquirer has also made Google more passive inside.
At the same time, there seems to be some conflict within Google’s cloud business. According to Insider statistics, nearly 30 corporate vice presidents have left since Kurian took the helm of Google Cloud in 2018. Dissatisfaction with top management is said to be the reason these vice presidents left.
At present, some of Google Cloud’s departing executives include: former Google Cloud Sales President Robert Enslin, former Google Cloud VP of Customer Experience John Jester, Google Cloud CFO Steffan Tomlinson, former Google Cloud Europe and Central Africa Business Head Sanj Bhayro, Former Google Cloud UK and Ireland General Manager Pip White, former Google Cloud Media Director Liens Ceulemans, former Google Cloud Marielle Lindgren, and former Google Cloud Alpine CEO Christian Martin.
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