Microsoft dominates cybersecurity space as rivals struggle to keep up: Bernstein

Investing.com -- Microsoft is emerging as the dominant force in cybersecurity as competitors struggle to match its scale and strategy, according to Bernstein. 

The firm’s analysts highlight that Microsoft (NASDAQ:MSFT)’s cybersecurity business has positioned itself as the go-to provider for enterprises struggling with mounting security challenges.

“The cybersecurity industry is in a constant state of flux,” Bernstein notes, with technological shifts, evolving cyber threats, and constrained IT budgets all contributing to an increasingly complex environment. 

They explain that AI, in particular, is amplifying risks by making cyberattacks more sophisticated and accessible to less-skilled hackers. 

“Already ~80% of cyber incidents start with stolen identities, phishing, or employee misuse, and AI may make these attacks even more effective,” Bernstein says.

Despite the challenges, companies that use IT strategically are increasing cybersecurity spending, while those that treat it as a secondary concern are struggling to keep pace, according to Bernstein. 

Microsoft is said to have capitalized on this divide, offering an integrated security suite through its E5 license, which Bernstein describes as “affordable” and highly rated by analysts. 

“They’ve delivered a comprehensive security suite… and became an expert hero for these struggling enterprises that make up the majority of buyers,” the firm notes.

While Microsoft leads the space, Bernstein notes that other cybersecurity firms have carved out niches. 

The firm says Palo Alto Networks (NASDAQ:PANW) has positioned itself as a strong alternative for companies that do not want to rely solely on Microsoft. 

Meanwhile, they note that CrowdStrike (NASDAQ:CRWD) has become a leader in Threat Intelligence, leveraging its expertise in Endpoint Detection and Response (EDR), and Zscaler (NASDAQ:ZS) has driven adoption of Zero Trust methodologies. Okta (NASDAQ:OKTA) is said to remain the leading independent provider in identity security.

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Bernstein sees Microsoft continuing to dominate, as companies seek cost-effective, all-in-one cybersecurity solutions, leaving traditional cybersecurity vendors to fight for market share in a rapidly evolving industry.

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