Alphabet Eyes $23 Billion Wiz Acquisition to Bolster Cloud Security
Brook.X
In a bold move within the tech industry, Alphabet Inc., Google's parent company, is set to invest a staggering $23 billion to acquire the cloud network security company Wiz. Founded in January 2020, Wiz has remarkably reached a valuation of $23 billion in just four years.
Wiz specializes in analyzing computing infrastructures hosted on major platforms such as Amazon AWS, Google Cloud, Microsoft Azure, Oracle Cloud, and Kubernetes to identify potential risk factors. The company creates a standardized layer across cloud environments, aiding businesses in swiftly detecting and neutralizing critical threats before they escalate.
The rapid valuation increase to $23 billion is backed by substantial growth metrics; Wiz announced in August 2022 that its annual recurring revenue (ARR) expanded from $1 million to $100 million rapidly. By February 2024, the ARR surged to $350 million.
Interestingly, while Wiz is headquartered in New York, USA, the majority of its 900 employees are in sales and marketing, with its principal engineering team based in Tel Aviv, Israel's second-largest city.
Google's interest in acquiring Wiz is driven by the potential for significant future returns and the expertise of the security team. The acquisition, spearheaded by Google Cloud's head Thomas Kurian, aims to significantly enhance Google Cloud's reputation as a secure cloud platform.
However, Wiz’s collaborations with various cloud computing platforms might be impacted by Google's acquisition. Competitors like AWS or Oracle might reconsider their partnerships due to competitive concerns or confidentiality issues.
Google's investment in the security domain is substantial, with the company purchasing Israeli security firm Siemplify for $500 million in January 2022 and acquiring the well-known cybersecurity company Mandiant for $5.4 billion in September 2022. Mandiant was a key investigator in the SolarWinds incident, highlighting its prominence in the cybersecurity field.
Despite the main engineering team being in Israel, Wiz is nominally a U.S. company, which might draw regulatory scrutiny to the acquisition. Even if the deal proceeds, regulatory bodies could pose significant hurdles.
