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If Alphabet’s Google is successful in its effort to buy cloud security company Wiz, it would significantly bolster its cloud security offerings for large organizations, which are prime targets for hackers.
According to experts, this move would help Google compete more effectively with cloud rivals Amazon.com and Microsoft.
Advanced Acquisition Talks:
Alphabet is in advanced talks to acquire Wiz, a source familiar with the matter said on Sunday. The deal, valued at up to $23 billion, would be Google’s most expensive acquisition and provide it with robust cybersecurity products designed to defend against ransomware gangs that have been disrupting large enterprises.
Market Potential and Competitive Edge:
“There is a hot market for cloud security,” said Jerome Seguera, a senior intelligence analyst at the cybersecurity firm MalwareBytes. He noted that Wiz offers customers “great visibility into their assets in a straightforward way.”
Wiz provides tools that allow organizations to scan their entire infrastructure and specific software for threats. Google has been steadily expanding its cybersecurity offerings recently, including its $5.4 billion acquisition of the popular cyber firm Mandiant two years ago.
“I think they are trying to compete with Microsoft and, to a smaller extent, AWS (Amazon Web Services),” said Marc Bleicher, chief technology officer of the security firm Surefire Cyber. “Wiz is one of only a few who address a big chunk of the cloud security market in one platform,” he added.
Origins and Growth of Wiz:
Wiz was founded in 2020 at the height of the coronavirus pandemic, capitalizing on the shift towards remote work and organizations’ move to cloud environments from desktops. Over the years, most large organizations have also shifted to storing their data on the cloud, introducing new security risks as companies expand and become more complex.
The founders of Wiz, former Israeli army intelligence members, previously founded another cloud security firm named Adallom, which Microsoft acquired for $320 million in 2015. Headquartered in New York, Wiz has grown rapidly since its inception.
Two months ago, at the RSA cybersecurity conference in San Francisco, Wiz announced it was valued at $12 billion. According to a person familiar with the Google deal talks, the company now expects annual organic revenue of $1 billion in 2025 and has raised nearly $2 billion in venture capital investment.
Increased Cybersecurity Deal Activity:
The talks to acquire Wiz come as the pace of global dealmaking in cybersecurity has significantly increased in 2024. There were 120 global cybersecurity deals announced in the first half of this year, accounting for $12.4 billion in deal value, compared to 137 deals last year with a total value of $4.8 billion, according to data from financial information firm Dealogic.
Dave Dewalt, founder of the cyber-focused venture capital firm NightDragon, attributed Wiz’s growth to strong marketing and being “at the right place, at the right time, with the right product.” Dewalt, former chief executive of cybersecurity firm FireEye, emphasized that cloud security is the most important and fastest-growing part of cybersecurity, driven by increasing attacks on large organizations.
“The stakes are exponentially higher in the cloud. So, therefore, the security needs to be exponentially stronger, and (there’s) more revenue from it,” he said. Dewalt also noted that companies like Palo Alto Networks and Crowdstrike have recently enhanced their cloud security offerings.
