Google has agreed to buy Wiz, a fast-growing cybersecurity startup. $32 billion in its biggest driving force to strengthen its cloud computing business and expand beyond its well-known search engines and consumer internet services.
The all-cash transaction announced Tuesday was easy to buy Motorola Mobility $12.5 billion in 2012, Google's largest and easy to buy.
With this agreement, Google will get a company that most consumers are unfamiliar with, but more and more companies are relying on to protect their cloud applications. The Silicon Valley giant worked for months last year to build a contract for Wiz. In July, Wiz rejected Google's $23 billion acquisition offer and said he wanted to pursue its first public offer, but the IPO never came.
The Splashy purchase injects new momentum into Google Cloud, the division that sells computing services to other businesses. It is also Tech Giant's most aggressive effort to keep up with long-time cybersecurity rival Microsoft.
“Today, businesses and governments operating in the cloud are looking for even stronger security solutions and are looking for a bigger choice of cloud computing providers,” Google CEO Sundar Pichai said in a statement. “Together, Google Cloud and Wiz have improved cloud security and the ability to use multiple clouds.”
But first, Google's parent company, Alphabet, must clear regulatory hurdles.
The deal tests the company's ability to implement mass acquisitions during its long antitrust battle with the US government. The Justice Department sued Google in two independent, monopoly cases. One is targeting ubiquitous search engines and those looking to break up their digital advertising technology business. A federal judge will determine that the company had maintained its monopoly illegally through online searches and decide on a bailout to restore competition by August.
Under President Trump, regulators continue to oppose corporate consolidation. In January, the Justice Department appealed to block the acquisition of Hewlett Packard Enterprise rival Juniper Networks, claiming the deal would eliminate competition and raise prices for the computer networking industry.
Alphabet has spent years trying to diversify from search engines, YouTube video services and other online advertising businesses that bring three-quarters of its revenue. Alphabet has founded ventures such as self-driving automotive companies Waymo and Verily, which focuses on healthcare, yet has not been fully rewarded.
The company is also sending resources to Google Cloud. Like its competitors Amazon Web Services and Microsoft Azure, the unit offers a variety of services to help businesses store and analyze data and run applications.
The WIZ acquisition coincides with plans to make Google Cloud a bigger player in cybersecurity. Under unit chief executive Thomas Kurian, Google Cloud bought two cybersecurity companies in 2022, buying Mandiant for $5.4 billion and became siemplify for the reported $500 million. This strategy could help Google keep up with Microsoft. This generates over $20 billion in annual revenue from security, making it the world's largest provider of cybersecurity software.
If completed, this transaction will also help reinvigorate Google Cloud's revenue growth. As the business grew, its pace usually slowed, but fourth quarter revenue rose 30% from the previous year to $12 billion.
Wiz grew at a passionate pace. Last year, recurring revenues increased from $100 million two years ago to $350 million. The New York-based company says it plans to reach $1 billion in repeat revenue in 2025.
“This acquisition strengthens our mission to improve security and prevent violations by providing additional resources and deep AI expertise,” Wiz CEO Assaf Rappaport said in a statement.
Wiz's investors include Andreessen Horowitz, Thrive Capital, Greenoaks and Advent International.
Lauren Hirsch contributed to the report from New York.
