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Google plans to buy cybersecurity company Wiz for $32 billion. Here’s why the startup is so valuable.

  • 18.03.2025 15:59
  • msn.com
  • Keywords: Cybersecurity, Acquisition

Google is acquiring cybersecurity startup Wiz for $32 billion, its largest deal ever. Wiz's advanced cloud security platform will bolster Google Cloud's capabilities, aiding competition against AWS and Azure.

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Estimated market influence

Alphabet Inc.

Alphabet Inc.

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Analyst rating: Buy

Alphabet shares are down nearly 4% in morning action.

Wiz

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Analyst rating: N/A

Wiz is a cybersecurity company that Google plans to acquire for $32 billion. Wiz has achieved rapid revenue growth and a strong executive team, making it highly valuable. The acquisition aims to strengthen Google's cloud security offering.

Palo Alto Networks Inc.

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Analyst rating: N/A

Palo Alto Networks is projected to show less rapid growth in annual recurring revenue compared to Wiz. It is considered Wiz's biggest rival in the CSPM arena.

Zscaler Inc.

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Analyst rating: N/A

Dali Rajic, Wiz's COO, previously worked at Zscaler, which is valued at $31 billion.

Microsoft Corp.

Microsoft Corp.

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Analyst rating: Strong buy

Wiz's CEO has experience leading Microsoft's cloud-security group. Google aims to compete with Microsoft Azure in the cloud market.

Amazon.com Inc.

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Analyst rating: N/A

Google is looking to strengthen its cloud platform to better compete against Amazon AWS and Microsoft Azure.

Context

Analysis of Google's Acquisition of Wiz: Business Insights and Market Implications

Key Deal Details

  • Acquisition Price: $32 billion, Alphabet Inc.'s largest deal ever.
  • Target Company: Wiz, a 5-year-old cybersecurity startup.
  • Rationale: Enhances Google Cloud Platform (GCP) security offerings, particularly in the AI era.

Wiz's Strengths

  • Financial Growth:
    • Annual Recurring Revenue (ARR): $500 million as of August 2024.
    • Target ARR for 2025: $1 billion.
  • Executive Team:
    • Dali Rajic (COO) previously at Zscaler ($31 billion valuation).
    • Assaf Rappaport (CEO) led Microsoft’s cloud-security group.
  • Product Lineup:
    • Specializes in Cloud Security Posture Management (CSPM) and Cloud-Native Application Protection Platforms (CNAPP).
    • Focuses on detecting vulnerabilities in multicloud environments.

Market Context

  • Competitive Landscape:
    • Wiz is seen as the top rival to Palo Alto Networks in CSPM.
    • Palo Alto’s projected ARR growth: 31-32% for its next-gen security business (vs. Wiz's exponential growth).
  • Market Demand:
    • Multicloud adoption increases risk management needs.
    • CNAPP solutions offer tighter integration with cloud development processes.

Strategic Implications

  • Google Cloud’s Positioning:
    • Aims to strengthen GCP against AWS and Azure.
    • Enhances enterprise security offerings, aligning with Google’s AI strategy.
  • AI Integration:
    • Wiz’s tools complement Google’s AI-driven approach to cybersecurity.
    • Reflects broader industry trends of hyperscalers acquiring “up-the-stack” security firms.

Competitive Dynamics

  • Analyst Views:
    • Wiz’s rapid growth and executive strength make it a strategic fit for Google.
    • The acquisition underscores the growing importance of cloud-native security solutions.
  • Industry Trends:
    • Agentic AI adoption is expected to drive demand for autonomous security tools.
    • Larger hyperscalers are likely to continue acquiring specialized cybersecurity firms.

Long-Term Effects and Regulatory Impacts

  • Market Expansion:
    • Positions Google as a stronger player in enterprise cloud security.
    • May accelerate innovation in AI-driven security automation.
  • Regulatory Considerations:
    • Potential scrutiny over antitrust concerns, given the size of the deal.
    • Impact on competition in the cybersecurity market.

Conclusion

Google’s $32 billion acquisition of Wiz highlights the growing importance of cloud security and AI-driven solutions. The deal underscores Google’s strategic focus on strengthening its enterprise cloud offerings while addressing the rising demand for robust cybersecurity in multicloud environments.