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As part of a strategy to improve its cybersecurity approach and better compete with Amazon and Microsoft in cloud computing, Google's parent company, Alphabet, announced plans to acquire Wiz for $32 billion, the largest acquisition in the company’s history. This price far exceeds the $23 billion dollar bid offered by Google for Wiz last year. That deal encountered issues as well because of antitrust regulations. The acquisition is still pending approval from regulatory agencies. The most significant purchase for Google previously was Motorola Mobility for $12.5 billion back in 2011.
With Wiz’s AI-based cybersecurity services, which help businesses reduce critical risks, the all cash transaction will allow Google to win open cloud business in an increasingly competitive environment fueled by generative AI services such as ChatGPT.
Why The Google-Wiz Deal Fall Forth in 2024
For most large deals, frameworks imposed in 2024 were restrictive, but with a new US president and the expected shift towards more relaxed antitrust rule during the Trump era, orderly Wall street is looking towards a more favorable outlook for big tech mergers that previously might have been stalled for too long.
Wiz is among the fastest growing software startups, having been last valued at $12 billion after a funding round last May where they began offering cloud-based cybersecurity services.
Why Google may be interested in purchasing Wiz
The cybersecurity industry has attracted all the attention ever since the global CrowdStrike outage back last year, which impacted multiple industries, resulting in businesses increasing their spending in security overhauls.
Wiz works with leading cloud service providers like Amazon Web Services, Microsoft Azure, Oracle, and Google Cloud, and has clients such as Morgan Stanley, BMW, and LVMH. For Google, acquiring Wiz meets two of its goals—aggressively growing its enterprise cloud business, where currently, it performs poorly compared to AWS and Microsoft Azure, and diversifying its relatively small security business to include Wiz, who forges strong security products.
This also allows Google to help balance its larger AI strategic investments with an expanded focus on cybersecurity.
During the announcement, Google noted that, “The increasing dependence on AI and cloud services has changed the entire landscape of security, increasing the role for cybersecurity to address new dangers and national security concerns.”
Google Cloud CEO Thomas Kurian further stated, “Wiz and Google Cloud have the same objective of simplifying and democratizing cybersecurity for all organizations regardless of their size and industry. We aim to minimize damage from security incidents, particularly within sophisticated software ecosystems, by empowering more companies to defend against cyber invasions.”
Wiz Acquisition by Google Timeline
Google’s note did not mention when the deal is expected to be closed. After purchasing Wiz, Google plans to move the company to its cloud division, but WIz's products will still be available on all other major cloud environments.
What happens to Wiz after the takeover
Wiz will still function as an independent platform to all cloud providers, not only Google Cloud, after the acquisition. The company intends to grow its headcount and make other strategic purchases to build on what it has done in the last year.
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