Google Secures Startup Wiz for $32 Billion to Enhance ‘Cybersecurity Accessibility And Simplicity’
Google has revealed its acquisition of cybersecurity startup Wiz for $32 billion. This acquisition marks the largest one by Alphabet, surpassing the previous record-setting $12.5 billion acquisition of Motorola Mobility in 2012. The company’s pursuit of this deal seems to be assertive in response to the increasing demand for secure cloud services.
The rise in generative AI has spurred tech firms to vie for cloud infrastructure, while notable security incidents, such as last year’s CrowdStrike outage, have heightened apprehensions. Wiz’s software integrates AI-driven security functionalities that pinpoint critical risks in cloud infrastructure, enabling developers to address them proactively before they escalate.
If Wiz’s offerings are assimilated, Google Cloud could glean a substantial edge in a domain where it has historically lagged behind Amazon Web Services and Microsoft Azure. In Google’s declaration on the acquisition, it mentioned that Wiz will furnish its clientele with enhanced and cost-effective security for diversified cloud and code environments.
Despite the acquisition, Wiz’s products will persist and remain accessible across leading clouds like Amazon Web Services, Microsoft Azure, and Oracle Cloud platforms.
Speaking on this acquisition update, Google Cloud’s CEO Thomas Kurian articulated: “Google Cloud and Wiz harbor a mutual aspiration to render cybersecurity more accessible and user-friendly for entities of any scale and sector.” Additionally, Sundar Pichai, CEO of Alphabet and Google, highlighted: “Collectively, Google Cloud and Wiz will accelerate advanced cloud security and multi-cloud utilization.”
SEE: CrowdStrike vs Wiz: Which Provides Enhanced Cloud Security and Value?
Wiz’s refusal of Alphabet’s prior proposition
Upon rejecting Alphabet’s previous $23 billion offer in July 2024, Wiz raised concerns about antitrust scrutiny and discrepancies regarding its operational independence or full integration into Google Cloud, as detailed in a report by The Wall Street Journal.
Following the failed deal, Wiz’s CEO Assaf Rappaport informed employees about the company’s plan to explore an initial public offering, believing it could achieve a higher market valuation as a publicly traded entity (the company was valued at $12 billion by investors in May 2024). Nevertheless, Rappaport evidently re-engaged with potential buyers subsequently.
Regulatory hurdles and Alphabet’s antitrust confrontations
Google mentioned that the completion of the deal is contingent on customary closing conditions, including regulatory approvals. Alphabet’s earlier bid encountered challenges due to antitrust regulations enforced by the Biden administration, such as the Executive Order on Competition, which mandates stringent scrutiny of mergers, especially in the tech sector.
While speculation arose that former U.S. President Donald Trump might repeal specific regulations to promote innovation, his administration instead introduced tariffs that could escalate expenses for technology companies. This policy shift has made investors cautious about major acquisitions.
SEE: Trump’s Import Tariffs: How They Will Affect Prices, Employment, and Trade
Furthermore, Google is currently entangled in two significant antitrust litigations in the United States. The Department of Justice, last year, demanded Google divest its Chrome browser, alleging that the company leveraged the platform to funnel users to its search engine, thus maintaining supremacy in online search. The company is awaiting a remedies trial as of now.
A judgment is pending on whether Google illegally monopolized the digital advertising realm through its ad tech enterprise, which has also faced legal scrutiny in the U.K. and EU. In August 2024, a U.S. federal judge ruled that Google holds a monopoly on general search services and textual ads and has violated antitrust regulations.
Alphabet’s webcast discussing the acquisition details will be available to view for the next two weeks. The webcast will feature Sundar Pichai, Thomas Kurian, Wiz CEO Assaf Rappaport, and Alphabet and Google CFO Anat Ashkenazi as they delve into the transaction.
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