Google seals $32 billion deal with cyber start-up Wiz
The deal would give Google a five-year old company that is not well-known to consumers but on which a growing number businesses rely to protect their cloud-based applications. The Silicon Valley giant spent months last year trying to negotiate a deal with Wiz, whose most recent valuation was $12 billion. The companies expect the purchase to be completed in 2026. It will give Google Cloud, a division that provides computing services to businesses, a boost. It would also be the tech giant’s most aggressive effort to keep up with rival Microsoft in cybersecurity.
In a conference call about the deal on Tuesday, Sundar Pichai, Google’s chief executive, said the company was buying Wiz because it “is an innovative, leading cloud security platform.”
He added: “The pace and impact of breaches are accelerating. A.I. Alphabet’s parent company would first have to clear regulatory obstacles. The Justice Department has sued Google in two separate monopoly cases, one targeting its ubiquitous search engine and another seeking to break up its digital advertising-technology business. Under President Trump, regulators continue to take a stand against corporate mergers. Mr. Pichai highlighted the start-up’s ability to drive growth, saying on the call that half of Fortune 100 companies use Wiz’s technology. Mr. Pichai highlighted the start-up’s ability to drive growth, saying on the call that half the Fortune 100 companies use Wiz’s technology.
Evelyn Mitchell-Wolf, an analyst at eMarketer, a firm that compiles business data, said in an email that it was uncertain if Google would receive regulatory approval for the deal.
“Given its price tag — and the fact that Google’s already been found guilty of anticompetitive conduct in the search market — the acquisition will attract too much scrutiny to go through completely unimpeded,” she wrote.
The purchase fits into Alphabet’s yearslong strategy of trying to diversify from the search engine, YouTube video service and other online advertising businesses that bring in three-quarters of its revenue. Alphabet’s venture companies, such as the self-driving company Waymo, and Verily, a health care company, have not yet paid off. Like its competitors Amazon Web Services and Microsoft Azure, the business offers services to help companies store and analyze data, as well as run applications.
The Wiz acquisition aligns with a plan to make Google Cloud a bigger player in cybersecurity. Thomas Kurian, Google Cloud’s chief executive officer, bought two cybersecurity companies in 2022 – Mandiant for $5.4 Billion and Siemplify, for reported $500 MILLION. The strategy could help Google catch up to Microsoft, which has said it generates more than $20 billion in annual revenue from security, making it the world’s largest provider of cybersecurity software.
Google and Wiz resumed talks about a deal in August, after Wiz walked away from an offer the month before, two people with knowledge of the negotiations said. Two people close to Wiz said that Wiz had started a new round of fund-raising after accepting Google’s offer. Mr. Kurian stated on the conference that if Wiz joins his division, they will continue to work with other cloud providers such as Microsoft, Amazon, and Oracle. He added that with Wiz, Google will be able to give customers more visibility into their own systems and defend against new threats emerging with artificial intelligence.
If completed, the deal may help reinvigorate Google Cloud’s revenue expansion. The pace of the business has slowed as it has grown. However, revenue in the fourth-quarter rose by a solid 30 percent compared to a year ago, reaching $12 billion. The company, based in New York, has said it plans to reach $1 billion in recurring revenue this year. The company, which is based in New York, has said it plans to reach $1 billion in recurring revenue this year.
The acquisition will “accelerate our rate of innovation faster than what we could achieve as a stand-alone company, thus enabling us to protect more organizations,” Assaf Rappaport, the chief executive of Wiz, said on the call.
Wiz’s investors include Andreessen Horowitz, Index Ventures, Thrive Capital, Greenoaks and Advent International.
Lauren Hirsch contributed reporting from New York.
