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Chances are that youve moved all your important documents, photos and other digital files to the cloud. So we cant ignore the significance of cloud cybersecurity moving forward as we continue to go completely digital in so many aspects of our lives.

Cybersecurity companies are fighting for market share as data breaches and ransomware attacks become more common, more damaging and more expensive. With many companies turning towards cloud technology, its no secret that companies like Google, Amazon and Microsoft are going to increase focus on this business sector.

That said, Googles recent acquisition of the cyber security company, Mandiant, has stirred up a lot of conversation about the future of cloud cybersecurity and the highly competitive landscape therein. Were going to look at this space to see how much money the big players are making.

It was announced on September 12 that Googles $5.4 billion bid to acquire the cybersecurity firm Mandiant was completed. Mandiant will be joining Googles cloud computing division so Google can attempt to compete with Amazons AWS and Microsofts Azure. This is Googles second-largest acquisition as the company aims to focus on enhancing its security operations suite and advisory services.

With companies worldwide facing cyberattacks, the cloud cybersecurity space is expanding, and fast. With over 17 years of experience, Mandiant is a publicly-traded cybersecurity company that rose to prominence by discovering the SolarWinds attack where 18,000 clients unknowingly downloaded malware. Due to the detection, less than 100 customers ended up getting hacked. The companys specialization in threat detection is what helped them stand out in the market.

Google is investing heavily in its cloud cybersecurity business sector. While Google still has a long way to go to catch up with AWS and Azure, the company is willing to invest its financial resources into growth, even to the detriment of short term profit.

When Google first announced the deal, they brought up how combining Mandiant with Google Clouds security offerings will help Cloud customers with increased protection in five key areas:

The company is also hopeful that the combination of Google Cloud and Mandiant will encourage further collaboration and innovation in the cybersecurity sector while increasing threat research capabilities. As cyber-attacks become more sophisticated, its clear that organizations, governments and individuals need further protection. Theres also significant money to be made in storage as more streaming services emerge.

We looked at the earnings report for Alphabet, the parent company of Google, to see how much the cloud business brings in. During the Q2 earnings report for 2022, the CEO of Alphabet and Google, Sundar Pichai, declared that performance for the quarter was driven by search and cloud functionality. The company has invested plenty of resources into the AI and computing thats needed to grow cloud services for businesses of all sizes.

Google brought in $21 billion in revenue from cloud services in 2021, which accounted for 7.5% of the companys total revenue. However, cloud services still ended up with a net loss of $3.1 billion in 2021.

For the second quarter of 2022, Google Cloud brought in $6.3 billion in revenue, which was a 35% year-over-year increase compared to the second quarter of 2021, when they brought in $4.6 billion in revenue. However, the company also lost $858 million for cloud services in the second quarter of 2022.

Many experts have observed that Google isnt profitable with its cloud services because they continue to invest in the growth of this sector. Amazon, on the other hand, has remained profitable in its cloud business.

Google executives continue to point to the growth potential of cloud services, highlighting that many companies are still in the early stages of a digital transformation.

Amazon Web Services (AWS) had an operating profit of $18.5 billion in 2021. AWS was also 74% of Amazons total operating profit in 2021. On an interesting note, AWS contributed 14% to the companys overall revenue while generating almost three-quarters of the profits.

For the second quarter of 2022, Amazon reported earnings of $19.74 billion in revenue with $5.72 billion in operating income for AWS. The revenue from the cloud services increased 33% during the quarter.

When you take a closer look at the earnings from Amazon, its clear that the cloud business is bringing in a majority of the profit, despite the e-commerce side bringing in more revenue. The cloud business simply operates atop higher margins.

AWS is the cloud computing service that provides data storage and networking for regular customers and big enterprise clients like Twitter and Netflix. Netflix uses AWS for almost all of its storage and computing needs. This includes everything from databases to analytics and even video transcoding. Amazon also has many other large companies that rely on AWS, which ensures that this sector will remain profitable.

Microsoft has remained competitive in the cloud cybersecurity space with Azure and other cloud services. According to the companys earning report for the second quarter in 2022, revenue from Intelligent Cloud was $20.9 billion. Microsofts Intelligent Cloud business sector includes Azure (the public cloud for application hosting), SQL Server, Windows Server and enterprise services. They dont list what revenues they bring in solely from Azure.

Revenue from Azure and cloud services went up by 40% in the last quarter, which is slightly lower than the 46% growth during the previous quarter.

Microsoft also invested in the cloud sector in 2021 with a few major acquisitions. They acquired CloudKnow and ReFirm labsboth major players in cloud security and internet of things (IoT) security, respectively.

The recent acquisitions by Google and Microsoft indicate that these giant companies plan to invest heavily in this business sector. With unprecedented levels of global cyberattacks, there will be more demand for increased cyber security.

Adam Selipsky, the CEO of Amazons AWS, recently remarked in an interview that he believes theres more room to grow in this space since cloud computing is still in its infancy. Selpisky told CNBCs Jim Cramer, Essentially, IT is going to move to the cloud. And its going to take a while. Youve seen maybe only, call it 10% of IT today move. So its still day 1. Its still early Most of its still yet to come.

He also mentioned that despite the steep competition, demand is still increasing for AWS. It will be interesting to observe how Googles acquisition of Mandiant performs and if this newly expanded business could increase Googles market share. Its currently estimated that Amazon has a 39% market share in the cloud cybersecurity space. Theres no telling how many more individuals and corporations are yet to make the complete digital transformation.

Its also worth mentioning that cybersecurity stocks were a rare bright spot earlier in the year when the stock market tumbled due to global conflict and rising inflation. Companies like Telos and CyberStrike remained strong as cybersecurity threats increased worldwide. This sector remained strong until worries of rising inflation and increasing interest rates led to further sell-offs.

From a business perspective, its going to be fascinating to see how Amazon and Microsoft react to Googles acquisition and if the giants decide to participate in additional mergers or acquisitions as well.

If youre looking to invest in cloud technology and cybersecurity, you have many companies to choose from. Cyber security companies will continue to do well as individual users, organizations and governments continue to rely on threat detection for safety. There will also be further demand for cloud storage as streaming services and others continue to put content online.

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More here:
Mandiant, Google, And The Future Of Cloud Cybersecurity - Forbes