- Alphabet’s biggest-ever acquisition aims to strengthen its cloud security portfolio.
- The deal positions Google against Microsoft and Amazon in the competitive cloud services market.
What happened: Alphabet secures Israeli cybersecurity startup in record-breaking acquisition
Alphabet, the parent company of Google, has announced its largest-ever acquisition, purchasing the cybersecurity startup Wiz for $32bn (£24.7bn). The Israeli firm, which specialises in scanning cloud storage providers such as Amazon Web Services (AWS) and Microsoft Azure for security vulnerabilities, initially turned down a $23bn offer from Alphabet last summer.
The acquisition is seen as a strategic move for Google Cloud as it aims to catch up with industry leaders Microsoft Azure and Amazon Web Services, both of which dominate the cloud computing market. Google currently holds a 12% share in the global cloud market, compared to Microsoft’s 21% and Amazon’s 32%.
Wiz was founded in 2020 by alumni of Israel’s Unit 8200, the military’s elite intelligence division, and has gained significant traction in the cybersecurity industry. The company, which has offices in New York and Israel, recently opened its European headquarters in London. It has backing from venture capital firms including Sequoia, Thrive, and Advent International.
The deal will allow Wiz to continue operating independently, following a model similar to Microsoft’s handling of LinkedIn. It will also maintain partnerships with major cloud platforms, ensuring its services remain available across AWS, Microsoft Azure, and Oracle Cloud.
Sundar Pichai, CEO of Google, emphasised the importance of the acquisition: “Together, Google Cloud and Wiz will turbocharge improved cloud security and the ability to use multiple clouds.”
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Why it’s important
This acquisition represents a significant shift in Google’s cloud security strategy. By integrating Wiz’s advanced security technology, Google aims to strengthen its cloud infrastructure against competitors Microsoft and Amazon. Wiz, with reported annual revenues of $750m, is expected to surpass $1bn in the coming years under Google’s leadership.
Regulatory scrutiny is anticipated, particularly in the US, where the Justice Department has been actively pursuing antitrust cases against major tech firms. Alphabet has agreed to pay a $3.2bn fee if the deal is blocked, reflecting the potential hurdles it may face.
Google has been working to diversify its revenue streams beyond search advertising, with cybersecurity emerging as a critical area of focus. This acquisition follows Alphabet’s $5.4bn purchase of Mandiant in 2022, highlighting the company’s ongoing investments in cloud security.
For the broader cybersecurity market, this deal signals heightened competition. Analysts predict increased consolidation, as other tech giants may seek similar acquisitions to expand their cloud security capabilities. According to Wedbush analyst Dan Ives, the deal is “a shot across the bow” for Microsoft and Amazon, underlining Google’s aggressive push into cloud services.
While regulatory and integration challenges remain, Wiz’s acquisition positions Google Cloud to gain market share in an industry projected to reach $1trn in value. The deal underscores the growing importance of robust cloud security solutions in an era of rising cyber threats.
