Google parent Alphabet has announced that it has reached an agreement to acquire Israeli cybersecurity company Wiz for $32 billion, the largest acquisition in Alphabet’s history.
Google is taking the step to compete more aggressively with rivals such as Microsoft and Amazon in the cloud technology market. Wiz offers technology that identifies security risks in cloud storage providers such as Amazon Web Services (AWS) and Microsoft Azure.
The company rejected Alphabet’s $23 billion takeover bid last summer because Wiz and some investors were concerned that it would face regulatory approval issues.
This time, Alphabet has agreed to pay $3.2 billion in damages if the deal falls through. The acquisition is seen as one of the key steps that will test the Donald Trump administration’s stance on tech giants.
Google’s Strategic Investment in Cybersecurity
The US Department of Justice is currently taking steps to force Google to sell its Chrome browser and weaken its monopoly in the search market. But this new acquisition by Google shows that the company is investing heavily in the cloud security space.
Wiz’s founders are graduates of the 8200th military unit, an Israeli intelligence unit. In addition to having offices in New York and Israel, the company opened its European headquarters in London last year. Wiz is backed by well-known venture capitalists such as Sequoia, Thrive and Advent International.
After the acquisition is completed, Wiz will continue to operate independently within Google. This will be based on the same model as Microsoft’s LinkedIn.
In addition, Wiz’s cybersecurity solutions will remain available on all major cloud platforms, including AWS, Microsoft Azure and Oracle Cloud.
Google and Wiz: The Future of Cybersecurity
Google CEO Sundar Pichai said in a statement about the acquisition:
"By working together, Google Cloud and Wiz will take cloud security to a new level and enable companies to more widely adopt multicloud solutions. Companies and governments that currently use cloud systems demand stronger security solutions and a wider range of cloud options."
Wiz CEO and co-founder Assaf Rappaport said that while this acquisition is a very important step for Wiz, what is more important are the opportunities created for customers and partners.
Dan Ives, an analyst at the US investment company Wedbush, emphasized that Wiz is one of the major players in the $ 1 trillion cybersecurity market and that this move will strengthen Google's position in the field of cloud security.
Wiz currently generates $ 750 million in revenue per year. Analysts believe that this figure could exceed $1 billion in the coming years, thanks to Google's large customer base and global market strategy.
Alphabet's Biggest Acquisition
This acquisition is the largest deal Alphabet has ever made. The company's previous largest acquisition was the purchase of Motorola Mobility in 2012 for $12.5 billion. However, Alphabet sold the company two years later for just $2.9 billion.
In recent years, Google has increased its strategic investments in cybersecurity. In 2022, Alphabet acquired Mandiant for $5.4 billion to strengthen Google Cloud's cybersecurity position.
In addition, the company acquired YouTube in 2006 for $1.65 billion and in 2014, it acquired British artificial intelligence startup DeepMind for £400 million.
Google has taken this strategic step to increase its share of the cloud market and compete with rivals such as Microsoft Azure (21%) and Amazon Web Services (32%). Google currently has a 12% share of the cloud market, and the acquisition of Wiz could help increase that figure.
Dan Ives added that the deal could be subject to serious scrutiny from regulators, but it is a strategic step to strengthen Google's leadership in cloud security.
