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

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

  • 19.03.2025 07:19
  • msn.com
  • Keywords: danger, danger

Google is buying cybersecurity firm Wiz for $32 billion, drawn by its rapid growth and leadership in cloud security. The acquisition aims to enhance Google's security offerings, particularly in the AI era, as Wiz provides advanced tools for detecting vulnerabilities in cloud operations.

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Estimated market influence

Alphabet Inc.

Alphabet Inc.

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Analyst rating: Buy

Alphabet is acquiring Wiz to strengthen its cloud security.

Wiz

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Analyst rating: N/A

Wiz's rapid growth and market position make it a valuable acquisition target for Alphabet.

Context

Analysis and Summary: Google's Acquisition of Wiz

Key Deal Facts

  • Acquisition Value: Google (Alphabet Inc.) is acquiring cybersecurity startup Wiz for $32 billion, marking Alphabet’s largest deal ever.
  • Wiz's Financial Growth:
    • Annual recurring revenue reached $500 million in August 2024.
    • Targeting $1 billion in annual recurring revenue by 2025.
  • Founded: Wiz was established just five years ago, yet it has grown rapidly.

Business Insights

  • Rapid Growth Driver: Wiz’s exponential growth is attributed to its product lineup, which simplifies cloud vulnerability detection and management for customers.
  • Strategic Fit for Google:
    • The acquisition aims to strengthen Google Cloud Platform (GCP) in the competitive cloud market dominated by AWS and Azure.
    • Enhances Google’s ability to compete with Microsoft and Amazon in enterprise cloud security.

Market Implications

  • Cybersecurity Demand: Reflects the high demand for cybersecurity solutions, particularly in cloud-native application protection platforms (CNAPP).
  • Cloud Security Growth: Wiz operates in the cloud security posture management (CSPM) sector, a rapidly growing area due to increasing multicloud adoption.
  • Regulatory Considerations: While regulators may scrutinize the deal for market consolidation, competition from established players like CrowdStrike and Palo Alto Networks likely ensures approval.

Competitive Landscape

  • Wiz vs. Competitors:
    • Wiz is seen as a major rival to Palo Alto Networks in CSPM.
    • Larger competitors like Palo Alto Networks project slower growth compared to Wiz’s exponential expansion.
  • Independent Pure-Play: Wiz is positioned as a “slick, pure-play, independent company,” appealing to customers seeking specialized cloud-native security solutions.

Strategic Considerations

  • Google's Catch-Up Strategy:
    • The acquisition addresses Google’s perceived weakness in enterprise cloud security.
    • Strengthens GCP’s value proposition with AI-driven security capabilities.
  • AI Integration: The deal aligns with Google’s focus on agentic AI, where AI agents autonomously manage tasks alongside human workers.

Long-Term Effects

  • Enhanced Cloud Offering: Wiz’s integration is expected to bolster Google’s cloud services, particularly in AI and enterprise security.
  • Potential for Innovation: Combining Wiz’s expertise with Google’s AI capabilities could lead to advancements in automated security solutions.

This acquisition underscores the growing importance of cybersecurity in the cloud era and highlights Google’s strategic focus on strengthening its position in the competitive cloud market.