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Google’s Motorola Mobility Holdings (MMI) Acquisition From Cyber Perspective: Potential Major Competitive Landscape Change


Google’s recent acquisition of Motorola Mobility Holdings, Inc. (NYSE: MMI) for $12.5 billion could have broad implications for the cybersecurity competitive landscape.  This deal implies not only that Google is no longer hardware agnostic, but now also has broader security concerns—hardware and firmware (in addition to core software) vulnerabilities.

We could envision a Google strategy whereby it uses security as a discriminator to dominate the cloud market by hardening data-at-rest/on-the-move across federal, intelligence, critical infrastructure, and other commercial verticals—and then integrate this capability with handheld (and other) devices.

If we were Google Corporate Strategy, the first two steps we would take to execute on this vision would be:

  1. Solidify formal partnership with General Dynamics.  a) GD acquired Motorola Integrated Information System (2001) for secure integrated communications, IA, situational awareness, and cryptography; b) GD has an exclusive partnership agreement with Bivio (DPI provider); c) GD has deep embedded customer contacts with the US Army (data center outsourcing/consolidation) and the Intelligence Community, in particular.
  2. Develop in-house cyber capability through a mix of organic, acquisition, and partnership investments for identified “must own” technologies.

Even just these first steps would have significant impact on industry:

  •  We would expect to see more movement out of the parent companies (Boeing, SAIC, HP, Intel, etc.) who bought point-solution providers (Narus, Cloudshield, ArcSight, McAfee) to demonstrate more publicly how recently acquired capability has been integrated into core offerings.
  • Verizon, with an emphasis on security and cloud (via Terremark/Cybertrust acquisitions and corporate reorganization) may have interest in more formal ties to Google for security.  AT&T could also join a potential partnership to strengthen its competitive positioning.
  • Defense primes could reconsider its competitive positioning/ strategies, especially with regards to ground system processing and analytics, internal IT and hardening core solutions.

We believe successful execution on any of the above potential strategies and counter-strategies will drive demand for cybersecurity acquisition targets, as companies work through internal capability gap assessments.  As the buyer universe expands, we would expect properties with leap-ahead technologies, scalability, and unique threat assessment understanding to be most coveted.

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