Mandiant CEO Kevin Mandia said on the company’s earnings conference call with analysts last week that he would not comment on rumors or speculation. Microsoft hasn’t commented either.
It’s no surprise that Microsoft is looking to use some of the huge amount of cash it has on its balance sheet to close some deals. Microsoft has about $130 billion and would still have about $60 billion left after the Activision deal closes…assuming it gets approved by regulators.
The cybersecurity sector is a major area of interest for Nadella. Last year, Microsoft bought several security startups, including CloudKnox Security, RiskIQ and CyberX.
Security is a lucrative business for Microsoft because it generates a large portion of recurring annual subscription revenue. It also helps Microsoft attract more enterprise customers for its many other cloud-based subscription software offerings.
So even if a Mandiant deal doesn’t materialize, Microsoft will likely be aiming elsewhere in the same space.
“Cybercrime is the number one threat facing all businesses today,” Nadella said during Microsoft’s latest earnings call with analysts last month. He added that cybersecurity revenue for Microsoft exceeded $15 billion in the past 12 months, a 45% jump from the previous year.
Microsoft Chief Financial Officer Amy Hood also noted on a conference call with analysts following the announcement of the Activision deal that the company is looking for more deals in high-growth markets where Microsoft can “uniquely add value to users or the community”.
She did not name any industries the company might target.
Microsoft isn’t the only tech company looking for deals. With interest rates likely to rise over the next few months, other cash-rich tech companies could be propelled into action.
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