Alphabet’s Google is in advanced discussions to acquire cloud security company Wiz in a deal potentially worth up to $23 billion.
If successful, this would mark Google’s most expensive acquisition to date and significantly enhance its cloud security offerings for large organizations, a key target for cyberattacks. This move positions Google to better compete with cloud rivals Amazon.com and Microsoft, experts say.
Cyber security market
A Gartner report forecasts that the information security and risk management market will grow from $185 billion in 2023 to $287 billion in 2027, achieving a compound annual growth rate (CAGR) of 11 percent.
End-user spending on security and risk management is projected to reach $215 billion in 2024, an increase of 14.3 percent from $188.1 billion in 2023, according to another forecast from Gartner.
IDC says investments in cybersecurity — hardware, software, and services — are expected to reach nearly $300 billion in 2026, driven by the threat of cyberattacks, the demands of providing a secure hybrid work environment, and the need to meet data privacy and governance requirements.
In 2023, Alphabet has generated revenue of $307.39 billion with 8.68 percent growth. Alphabet does not reveal its sales from security business.
What’s Wiz
Wiz, known for its tools that allow organizations to scan their entire infrastructure and specific software for threats, would bolster Google’s capabilities in defending against ransomware attacks and other cybersecurity threats, Reuters news report said.
“There is a hot market for cloud security,” noted Jerome Seguera, a senior intelligence analyst at MalwareBytes. “Wiz gives customers great visibility into their assets in a straightforward way.”
Google has been steadily expanding its cybersecurity portfolio, having acquired the prominent cyber firm Mandiant for $5.4 billion 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 Surefire Cyber. “Wiz is one of only a few who address a big chunk of the cloud security market in one platform.”
Wedbush Securities analyst Daniel Ives describes Alphabet’s potential $23-billion acquisition of cybersecurity giant Wiz as a strategic “poker move.” This would be Google’s largest M&A deal, building on its Mandiant acquisition in 2022.
Founded in 2020 during the coronavirus pandemic, Wiz capitalized on the shift towards remote work and cloud environments. The company, headquartered in New York, has rapidly grown and was valued at $12 billion just two months ago at the RSA cybersecurity conference in San Francisco. Wiz projects annual organic revenue of $1 billion by 2025 and has raised nearly $2 billion in venture capital.
Wiz’s founders, former Israeli army intelligence members, previously founded another cloud security firm, Adallom, which was acquired by Microsoft for $320 million in 2015.
As large organizations increasingly store data in the cloud, the complexity and associated security risks have grown, making comprehensive cloud security solutions like Wiz’s highly valuable.
Baburajan Kizhakedath
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