Local cybersecurity and defence stocks surged  this morning after mega tech Microsoft pledged $5bn into turbo boosting its operations Down Under over the next two years.

The plan is to upgrade Australia into a defendable digital fortress.

The PM is in Washington and is already hanging out with Microsoft bosses as his four-day state of mates visit with US President Joe Biden begins on a high note for fans of big tech and bilateral military and technological ties.

Albanese said MSFT’s huge commitment was “a major investment in the skills and workers of the future, which will help Australia to strengthen our position as a world-leading economy”.

This morning, as news of the software giant’s ‘major digital infrastructure, skilling and cybersecurity investments in Australia’ hit the street, cybersecurity-related ASX stocks surged higher:

Tesserent (ASX:TNT) (+2.3%)

Tesserent provides full service, enterprise-grade cybersecurity and networking solutions targeted at midmarket, enterprise and government customers across Australia and New Zealand.

The company’s Cyber 360 strategy delivers solutions covering identification, protection and 24/7 monitoring against cybersecurity threats.

TNT is currently a takeover target by Thales Australia, which has proposed to acquire 100% of TNT shares at 13c.

 

archTIS (ASX:AR9) (+21.05%)

This data-centric security technology company will prevent malicious and accidental loss of information for its clients.

archTIS products NCProtect and Kojensi, are multi-government certified platforms for the secure access, sharing and collaboration of sensitive and classified information.

In July, archTIS signed a new agreement with the Bank of Finland, an existing customer, to license NC Protect and the NC Encrypt module. The purchase migrates the Bank of Finland from the previously acquired cp.Protect offering.

 

Senetas (ASX:SEN)

The company’s subsidiary Votiro owns the software tools that protect against malware and ransomware attacks.

Founded in Israel, Votiro has developed the technology that has the ability to proactively eliminate all known and unknown threats hidden in files.

According to Senetas, Votiro’s secure file gateway is the only SaaS-based file security solution that ensures all files coming into an enterprise are safe from malware threats and particularly ransomware.

 

Sovereign Cloud Holdings (ASX:SOV) (+5.3%)

Sovereign Cloud and its AUCloud product serve Australian government clients, the Australian Defence Force and critical national industry communities. A leading infrastructure-as-a-service company, the company provides cloud-based computing services like virtual desktops.

 

WhiteHawk (ASX:WHK) (+5.00%)

Whitehawk offers an online tool that enables small and midsize businesses to take immediate action against cybercrime, fraud, and disruption.

In July, Whitehawk announced that the US Federal Government contract for Cyber Risk Radar announced in July 2020 has been extended for fourth year, valued at US$672k base, with an option for additional US$505k services.

The Cyber Risk Radar is an annual Software-as-a-Service (SaaS) subscription service developed by WhiteHawk that enables clients to assess, identify, monitor, prioritise, and mitigate business and cyber risks of their supply chain vendors.

Hubify (ASX:HUB)

Hubify specialises in business connectivity across mobile, data, voice, cloud solutions, and of course, cyber security. Its other offerings include managed networks, global wi-fi, and hosted voice.

The company has confirmed its strategy to expand its cybersecurity’s business, as it rapidly grows strongly along with its enterprise customer offerings.

FirstWave Cloud Tech (ASX:FCT)

In April, the Aussie cybersecurity and network management software company has announced release of a significant new upgrade to its cybersecurity-as-a-service platform CyberCision.

Code-named Arcanine FCT said the update significantly extends capability of trademarked CyberCision and will expand the platform’s marketability at a time when numerous cybersecurity data breaches have made headlines.

FCT said the update includes a new standalone deployment system for government platform installations and incorporates cutting-edge tech acquired as part of FCT’s takeover of Opmantek in early 2022.
 

A simple plan

The Microsfit plan is simple – train 300K local experts in artificial intelligence (AI) and cloud computing while also fighting online threats alongside Australia’s top cyber-spy agency.

The wad of cash represents MSFTs ‘single largest investment in its forty-year history in the country’ and will help Australia ‘seize the artificial intelligence (AI) era to strengthen its economic competitiveness, create high-value jobs and protect the nation from the increasing threat of cyberattacks.’

This investment will also grow Microsoft’s local datacentre footprint from 20 sites to a total of 29 spread across Canberra, Melbourne and Sydney.
 

Welcome to the Microsoft Academy

But wait there’s more.

Microsoft is working with the legends at TAFE NSW towards establishing a Microsoft Datacentre Academy in Australia, as part of the multi-pronged effort to realise the full potential of the digital infrastructure investment.

The company says it will also extend its global skills programs to help more than 300,000 Australians gain the capabilities they need to thrive in a cloud and AI-enabled economy.

After that things get a little covert.
 

Big MACS – the Microsoft-Australian Signals Directorate Cyber Shield

Microsoft will collaborate with the Australian Signals Directorate (ASD) on an initiative called the Microsoft-Australian Signals Directorate Cyber Shield (MACS), aimed at improving protection from cyber threats for Australian residents, businesses and government entities. As part of this partnership, Microsoft will work with ASD to build fit-for-purpose, next-generation cybersecurity solutions.

The announcement coincides with Albo’s state visit to the US, where he’s already been gladly-handing the Microsoft vice chair and President Brad Smith.
 

‘Expand Australia’s digital capacity to seize the AI opportunity’

Microsoft says the money will ‘increase its (our) computing capacity by approximately 250 per cent over the next two years.’

“This will enable the company to meet the growing demand for cloud computing services, which are expected to almost double from A$12.2 billion in 2022 to A$22.4 billion in 2026.” That’s according to a whitepaper by International Data Corporation, commissioned by Microsoft.

The investment will also enable Australia to capitalise on the significant economic and productivity opportunities presented by the latest AI technology, which were highlighted in a recent report by the Tech Council of Australia and Microsoft.

The report found that generative AI – if adopted at an accelerated pace – could contribute as much as A$115 billion a year to Australia’s economy by 2030.

“Microsoft will ensure that its new data centres in Australia help meet the company’s sustainability goals of being carbon negative, water positive and zero waste by 2030. This includes using low-carbon materials during construction, as well as using renewable energy, advanced water-cooling features and measures to decrease diesel fuel use during operation.”

Microsoft’s skilling investments are part of the tech industry’s shared commitment with the Australian Government to fill 1.2 million tech-related jobs across the country by 2030.
 

Build cyber-capability for the era of AI

The Microsoft-ASD Cyber Shield (MACS) builds on the longstanding partnership between Microsoft and the Australian Government, where the exchange of cyber threat information has led to better protection for Australian residents, businesses and government entities.

The collaboration will enhance the government and Microsoft’s joint capability to identify, prevent and respond to cyber threats, which are growing in both frequency and severity.

To highlight the scale of the problem, ASD’s national Cyber Watch Office received more than 76,000 cybercrime reports in the 2021–22 financial year, an increase of nearly 13 per cent from the previous year. This equated to one report every 7 minutes.

MACS will include the evolution of national threat intelligence sharing capabilities, with a focus on detecting, analysing and defending against sophisticated nation-state cyber threats.

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