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Recently, Google revealed one of the most significant, yet perhaps the riskiest, moves in its history – the acquisition of the cloud security firm Wiz for an eye-popping $32 billion. This bold step comes as Google doubles down on securing its position in the highly competitive tech landscape, especially in the rapidly growing cloud security sector. However, the question remains: is this a smart investment or a gamble that could reshape the future of the tech giant?
In this article, we'll provide with an overview of the Google-Wiz deal:
The process behind Google’s acquisition of Wiz
The strategic motivations driving this acquisition
The potential and challenges this deal brings to Google
The all-cash acquisition comes after Wiz rejected a $23 billion offer from Alphabet last year, citing concerns over antitrust approval and a focus on its upcoming initial public offering (IPO). Alphabet's earlier attempt to acquire Wiz at that price failed due to regulatory concerns. Now, Alphabet has agreed to purchase Wiz for approximately $32 billion in its largest-ever acquisition, expected to close by 2025.
Thương vụ Google mua lại Wiz gây chấn động giới công nghệ
Founded in 2020 by former members of Israel's cyber intelligence unit and now based in the U.S., Wiz offers cutting-edge cloud security services and has quickly become one of the fastest-growing software startups. According to co-founder Roy Reznik, the company is on track to generate $500 million in annual recurring revenue by 2024 and aims to double that by 2025. Wiz currently secures cloud services for nearly half of the top 100 U.S. companies.
This acquisition is significantly larger than any previous deal by Alphabet, including its $12.5 billion purchase of Motorola Mobility, which was later sold. In 2022, Alphabet spent $5.4 billion to acquire cybersecurity firm Mandiant to enhance its Google Cloud offerings. Following this acquisition, Wiz will join Google Cloud, which generated over $40 billion in revenue in 2024, outpacing Google’s search business in recent years.
Wiz’s products will continue to be available across all major cloud platforms. Alphabet expects the deal to be finalized by 2026, pending regulatory approval.
"Cloud is more important than ever, and companies need to use the most advanced technologies to move faster," said Assaf Rappaport, CEO and co-founder of Wiz. Google, with its extensive cloud infrastructure, has been a leader in cloud services for years. However, it has lagged behind AWS and Microsoft Azure in the critical area of cloud security. The acquisition of Wiz is a strategic move aimed at closing this gap and bolstering Google's security offerings in the cloud space.
The cloud industry remains fiercely competitive, with AWS and Microsoft Azure holding dominant market shares. Google Cloud has made significant strides recently, but it still ranks third globally, with around 12% market share. It trails behind Microsoft’s Azure, at 21%, and Amazon Web Services, which commands nearly a third of the global market. Alphabet is aiming to boost its cloud revenue and reduce its dependency on search advertising, making cloud security a key focus area.
Through this acquisition, Alphabet is concertedly strengthening its security offerings to gain an edge in the ongoing cloud computing race with Amazon and Microsoft. By integrating Wiz’s advanced security solutions, Google can reassure clients that Wiz’s products will continue to work seamlessly across multiple cloud platforms, including AWS, Microsoft Azure, and Oracle Cloud. At the same time, it will offer robust security solutions for other partners on the Google Cloud Marketplace.
This deal represents a significant step in enhancing Google Cloud’s cybersecurity portfolio. Wiz’s solutions, powered by AI, will help businesses address critical risks, giving Google a competitive advantage, especially as the demand for AI-driven services, such as ChatGPT, continues to rise. According to analyst Gil Luria of DA Davidson, the high acquisition price reflects Wiz's exponential growth over the past year. "To compete with Microsoft Azure in the enterprise race, Google needs to offer a deeper suite of services, including security software," Luria added.
Currently, OpenAI relies on Microsoft Azure to power its AI services, while Anthropic, the company behind Claude, operates on both AWS and Google Cloud. Midjourney, another AI company, has chosen Google Cloud as its primary provider. With Microsoft’s cybersecurity practices under increasing scrutiny, the timing is ideal for Google to strengthen its position in the cloud security market. By acquiring Wiz, Google positions itself as a stronger competitor in the fast-growing cloud security sector, ensuring it remains relevant and competitive as the cloud landscape continues to evolve.
From our view, the acquisition of Wiz presents Google with promising opportunities Google
Strengthening cloud security offerings
First and foremost, integrating Wiz’s advanced security solutions will greatly enhance Google Cloud’s security capabilities. As cybersecurity becomes an increasing priority for enterprises, this acquisition allows Google to better serve clients with stronger, more comprehensive security offerings. This step positions Google Cloud as a trusted provider for businesses seeking a secure and reliable cloud solution. By strengthening its security suite, Google has a greater opportunity to attract enterprise clients, helping it further solidify its foothold in the cloud market.
Closing the gap with competitors
Moreover, this acquisition allows Google to close the competitive gap with its primary rivals, AWS and Microsoft Azure, in the cloud security sector. While Google Cloud has made significant progress in recent years, it has often been seen as trailing behind AWS and Azure in terms of security features. Bringing Wiz into the fold will allow Google to level the playing field and offer equally strong, if not superior, security services, an increasingly important factor as cloud adoption grows.
Alignment with AI Focus
The acquisition also aligns with Google’s broader focus on AI. Wiz’s AI-powered security solutions integrate seamlessly into Google’s existing AI infrastructure. This enables Google to enhance its security capabilities with advanced AI-driven tools, catering to the rising demand for smarter, more proactive cybersecurity solutions. Google can offer a compelling value proposition by combining AI and cloud security, making it a key differentiator in a crowded market.
Expanding customer base
Wiz already serves some of the largest companies in the U.S., and integrating its technology into Google Cloud could help attract even more enterprise clients, broadening Google Cloud’s customer base and bolstering its growth prospects.
Google’s $32 billion acquisition of Wiz is a bold move that could have a major payoff. This isn’t just any ordinary business deal; it’s about enhancing the security of Google’s products. By bringing Wiz’s advanced security solutions into the fold, Google Cloud has a real opportunity to strengthen its position in the cloud market. Google is betting that the potential rewards far outweigh the risks — Wiz could be the key to putting Google’s services on the map at a pivotal time for both cloud computing and AI.
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