Google’s parent company, Alphabet, is in advanced discussions to acquire the rapidly growing cybersecurity startup Wiz for approximately $23 billion, according to a source familiar with the matter. This potential acquisition would be Google’s largest to date, underscoring the company’s significant investment in cybersecurity.
Google’s Major Bet on Cybersecurity
Wiz specializes in cybersecurity software for cloud computing. Acquiring Wiz would mark a substantial investment by Google in enhancing its cybersecurity capabilities. This move aligns with Google’s broader strategy to strengthen its cloud computing business and protect against increasing cyber threats.
Discussions Between Google and Wiz
Talks between Google and Wiz began after the startup raised $1 billion from venture capital investors earlier this year. Although the terms of the deal are not yet finalized and talks could still fall through, the source confirmed ongoing negotiations. The Wall Street Journal first reported the news of these discussions.
Largest Acquisition in History for Google?
If finalized, this deal would surpass Google’s previous largest acquisition, the $12.5 billion purchase of Motorola about a decade ago. Google later sold Motorola for a significant loss. A $23 billion acquisition of Wiz would nearly double the startup’s most recent valuation of $12 billion from its latest funding round.
In March 2022, Alphabet acquired cybersecurity firm Mandiant for $5.4 billion to bolster its efforts in addressing cyber threats and strengthening its cloud computing services. This move reflects Google’s ongoing commitment to enhancing its cybersecurity offerings.
Strategic Implications
Google Cloud is central to Alphabet’s strategy to diversify its revenue streams beyond core search advertising. Although cloud sales have grown, Google has faced challenges competing with Microsoft and Amazon in this sector. Acquiring Wiz would be a bold move to enhance Google Cloud’s security features and compete more effectively.
Gizchina News of the week
Dan Ives, managing director and senior equity research analyst at Wedbush, noted that this acquisition would be a significant step for Google. It signals a major investment in cybersecurity to complement its cloud services, directly challenging Microsoft and Amazon.
Importance of Cloud Security
Cloud security has become increasingly crucial as companies migrate data to cloud platforms. The importance of robust cloud security was highlighted recently when AT&T revealed that nearly all its wireless customers’ call and text records were exposed in a major breach caused by an “illegal download” on a third-party cloud platform.
The acquisition talks occur amidst intense antitrust scrutiny of tech giants under the Biden administration. However, analyst Dan Ives suggests that if Trump were to regain the White House, antitrust pressures could lessen, potentially leading to more mergers and acquisitions in the tech industry.
Wiz’s Success Story
Founded in March 2020 during the COVID-19 pandemic, Wiz has experienced rapid growth. The startup, based in New York City, was founded by Assaf Rappaport, Ami Luttwak, Yinon Costica, and Roy Reznik, who met during their service in Unit 8200, the cyber intelligence division of the Israel Defense Forces.
Wiz claims that 40% of Fortune 100 companies are its clients, including notable names like BMW, Slack, and Salesforce. The company also collaborates with major cloud providers, including Amazon, Microsoft, and Google.
Conclusion
If the acquisition comes to fruition, it will represent a significant exit for Wiz and its founders. It also reflects the startup’s remarkable growth and success in the cybersecurity industry. For Google, this move would solidify its commitment to cloud security and position it more strongly against competitors in the cloud computing space.
This potential acquisition underscores the growing importance of cybersecurity in the tech industry and highlights Google’s strategic efforts to enhance its capabilities and protect its cloud services from evolving cyber threats.
