Microsoft is on a shopping spree; see what your next target could be

Microsoft CEO Satya Nadella is on a big shopping spree.

The company’s planned purchase of video game maker Activision Blizzard, priced at nearly $70 billion, is Microsoft’s biggest and boldest acquisition. But it’s hardly the only notable deal in the Nadella era.

Microsoft bought the advertising technology company Xandr from CNN owner AT&T late last year for $1 billion. The company also shelled out nearly $20 billion to cloud software company Nuance in early 2021.

This is on top of several other billion-dollar deals Microsoft has made since Nadella took over in 2014, including the acquisitions of Minecraft developer Mojang, the owner of game studio Bethesda ZeniMax Media, the code-coding website open GitHub and the enterprise social media network LinkedIn.

The LinkedIn deal was previously Microsoft’s biggest, with a value of $26.2 billion.

Now, there are reports that Microsoft is looking to buy Mandiant, the cybersecurity software company formerly known as FireEye, currently valued at around $4.5 billion.

Mandiant CEO Kevin Mandia said on the company’s earnings call with analysts last week that he will not comment on rumors or speculation. Microsoft also had no comment.

It should come as no surprise that Microsoft is looking to use some of the huge amount of cash on its balance sheet to close some deals. Microsoft has about $130 billion and would still have about $60 billion left over after the Activision deal closes — assuming it passes regulators.

The cybersecurity business is one of Nadella’s key areas of focus. Last year, Microsoft bought several security startups, including CloudKnox Security, RiskIQ, and CyberX.

Security is a lucrative business for Microsoft as it generates a large chunk of recurring annual subscription revenue. It also helps Microsoft attract more enterprise customers to its other numerous cloud-based subscription software offerings.

So even if a deal with Mandiant doesn’t happen, Microsoft will likely aim elsewhere in the same business.

“Cybercrime is the #1 threat every business faces today,” Nadella said during Microsoft’s most recent earnings call with analysts last month.

He added that Microsoft’s cybersecurity revenue topped $15 billion in the past 12 months, up 45% from the year before.

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 business in high-growth markets where Microsoft can “add value to users or the community.”

She did not name any industries the company could target.

Microsoft isn’t the only tech company looking for business. With interest rates likely to rise in the coming months, other tech giants may be spurred into action.

Two others already have. Intel announced Tuesday that it was buying Tower Semiconductor for $5.4 billion in cash. IBM said on Tuesday it was buying Neudesic, a cloud services consulting firm. Terms were not disclosed.

And there are reports that Cisco Systems has made a $20 billion bid for Big Data company Splunk.