Alphabet, the parent company of Google, is reportedly in advanced negotiations to acquire the cybersecurity startup Wiz for approximately $23 billion, as per sources familiar with the situation.
If this acquisition goes through, it would mark Alphabet’s largest acquisition to date and signify a significant strategic shift for the tech giant.
Wiz, now based in New York, is among the fastest-growing software startups globally. Specializing in cloud-native cybersecurity solutions, Wiz offers AI-powered real-time detection and response services. By 2023, Wiz had generated $350 million in revenue and secured over 40% of the Fortune 100 market share.
The deal, expected to be finalized soon, would involve primarily cash payments. This move comes amidst increasing scrutiny of tech industry acquisitions by governments worldwide. The U.S. government, under the Biden Administration, has become more cautious with such transactions, making Alphabet’s expansion efforts more aggressive compared to other ongoing tech deals in the U.S.
With its rapid growth and strong market presence, Wiz recently closed a $1 billion private funding round at a $12 billion valuation. Having served top enterprises like Morgan Stanley and DocuSign, Wiz has established itself as a reputable cybersecurity provider. With a team of over 900 employees across the U.S., Europe, Asia, and Israel, Wiz plans to add 400 more global staff by the end of the fiscal year 2024.
Industry analysts view this acquisition as a strategic investment for Alphabet to enhance Google Cloud Platform’s (GCP) position in the competitive market. Ray Wang, principal analyst at Constellation Research, believes Google could attract customers from AWS and Azure by acquiring Wiz in the dynamic cloud security sector.
The potential acquisition could significantly differentiate Google in the cloud security space, notes Pareekh Jain, CEO of Pareekh Consulting. As cybersecurity incidents continue to rise, enterprises may factor in security considerations when deciding to move to the cloud.
This deal could help Google reduce its reliance on online advertising revenue and stay competitive in the market. Given the importance of AI and security, Google may use this opportunity to enhance its capabilities in these areas.
The acquisition of Wiz would add to Google’s cybersecurity-related acquisitions, including the purchase of Mandiant for $5.4 billion and Siemplify. This would be Alphabet’s first acquisition of this scale in the cybersecurity sector.
The technology sector has seen increased deal activity this year, with notable transactions like Synopsys acquiring Ansys for around $35 billion and Hewlett Packard Enterprise buying Juniper Networks for $14 billion. Data from Dealogic shows that technology mergers and acquisitions attracted $327.2 billion in the first half of this year, marking a 42% year-on-year increase.
Stay tuned for regulatory responses and potential competition impacts in the cloud services and cybersecurity sectors. The outcome of this acquisition could shape the strategies of the technology industry in cloud computing, AI, and cybersecurity.
(Photo by Mitchell Luo)
**See also: Google and Microsoft restructures cut jobs in cloud and AI divisions**
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Tags: cloud, cybersecurity, google cloud, Security
