What happened
Everyone gets scared when an 800-pound gorilla barges into the room. Investor fear was palpable on Wednesday, expressed in the notable sell-offs of cybersecurity titles Cloudflare (NET 1.44%) and Palo Alto Networks (PANW 0.91%).
The former's share price closed the day almost 6% lower, while the latter's slid by slightly over 7%. To put that into context, stocks generally had a good trading day, with the benchmark S&P 500 index rising by 0.7%.
So what
That very intimidating animal making a sudden entrance was tech giant Microsoft (MSFT 1.82%). The company announced the launch of two new cybersecurity products, Entra Internet Access and Entra Private Access.
Under the wing of its Entra identity and network security brand, the pair of new offerings will be immediate and serious competitors in the secure service edge (SSE) segment. That directly pits Microsoft against Cloudflare, Palo Alto Networks, and a host of other cybersecurity businesses.
Microsoft stated in its press release on the new products, "To help organizations protect their ever-evolving digital estates, we've been expanding beyond managing directories and authenticating users to securing and governing access for any identity to any app or resource."
Now what
For decades now, Microsoft has proved itself to be not only a tough and well-resourced competitor, but also at times a ruthless one. The fact that it is devoting resources and effort to popular cybersecurity solutions is rightfully causing concern for shareholders of the smaller guys. Cloudflare, Palo Alto Networks, and any other organization specializing in these solutions have their work cut out for them now more than ever.
