Why did Google made a bet of $ 32 billion on Wiz

The latest Google acquisition is the most expensive so far – and perhaps the most dangerous, too. Tuesday, The research giant announced She got Wiz Startup Cloud Security for $ 32 billion. It is a great bet that WIZ can help boost Google cloud works, making money much less than the offers that their competitors have built. But to do this, Google is facing real challenges to merge this expensive acquisition and run away from organizational concerns about what is certain to be a high -level purchase.

Microsoft and Amazon have benefited greatly from Ai Cloud Gold Rush, with their cloud services access 105.4 billion dollars and 107.6 billion dollarsRespectively, during the 2024 fiscal year. Google, on the other hand, is a secondary player compared; Her cloud revenues It exceeded 43 billion dollars only In 2024. With a mutation of artificial intelligence, no signs of stopping appear, Google may have found a way to reduce the gap with her Titans, even if she had to spend billions of dollars to get there.

“Security is a basic priority for executives and government leaders around the world, but the scene changes,” said Google Sundar Pichai. Call investors. “The pace and effects of violations are accelerating. The deal will bring Wiz under the Google Cloud umbrella.

Despite Google He was in talks To buy Wiz last year for $ 23 billion, WIZ fell due to concerns about the retreat of federal organizers and plans To make a preliminary general offer. With more Trump’s friendly management of integration In control, companies may be able to formulate a path that goes beyond regulatory obstacles.

Wiz was founded in 2020, and it quickly became one of the fastest growing software companies in the world. Its leadership team has a history of success in cloud startups: CEO of Wiz Assaf Rappaport and many members of his executive team were also behind Adallom – cloud security start Microsoft bought for $ 320 million In 2015 and The brand was later renamed like Microsoft Defender for cloud applications.

Besides what Forbes Calls The “excessive infection” approach to the maintenance of maintenance of maintenance, Wiz is killed in the constantly increasing artificial intelligence. It provides a solution called Agement Security, which means that companies do not have to spend hours deploying individual security programs – or agents – on every device they want to secure. It connects to a cloud environment remotely, allowing experts to oversee their preparation using a digital twin, or a copy of the preparation of a cloud that they can use to simulate the effect of potential threats.

Other companies, such as Palo Alto Networks and Crowdstrike, offer similar security tools. But the implementation of Wiz is different. “Anyone can do a deficit,” said Neil McDonald, a distinguished analyst in Gartner. freedom last year. “It is the way you can stitch together and build this twin digital model, determine customers, prioritize and help customers, and tackle risks … and this is really good (Wiz).”

Wiz also offers an easy -to -use user interface. Macdonald says it is one of the “best” in its class. One of the tools provides a web scheme that displays all connections in a cloud environment and how the breach can affect it, while another scans a cloud setting to find and identify the risks. These types of features will become more important only because large companies – their users – pledge their data to the cloud, whether for storage or to process demands with artificial intelligence.

As a group of emerging companies of artificial intelligence continues to shop for the cloud supply, they may take the Google Cloud integration with Wiz in mind. Company The bills themselves As the “customer of all business size – from startups to Fortune 100s.” Wiz’s Marketing has yielded, as Rappapt has expanded an emerging range of one million dollars of annual revenue to $ 100 million in only 18 months in 2022. Since has since achieved $ 350 million of annual revenue, and used nearly half of the companies in the list of the best 100 from the Fortune 500 list of the program. In May 2024, startup Billion dollars collectedAnd the company’s evaluation is about $ 12 billion.

For Google, this distant audience is a great advantage. The search giant may use this acquisition as an opportunity to convert some Wiz customers into Google Cloud, according to Report 2024 from Information. Openai is currently using Microsoft Azure to operate its AI services, while AI – AI is behind Claude – operates on AWS and Google Cloud. Another Amnesty International Company, Midjourney, Google Cloud has been chosen as its provider. And with Microsoft’s Cyber ​​security practices facing increased auditIt is good to enter Google in the cloud safety game.

Customers do not even choose Google Cloud as their Google provider to benefit. Since Wiz is directly integrated with the services provided by Google, Amazon, Microsoft, Oracle, etc., Google can create itself as a safety provider that exceeds its cloudy width. Aside from Wiz, the growing safety portfolio of Google Mandiant, Virustotal and Chronicle (now known as Google Security Operations). “Google wants to become a dangerous seller for institutions,” said McDonald. “WIZ helps to enhance its credibility as a security player for the institution.”

“For Google, this will be a snapshot across the arch in Microsoft and Amazon, making a great bet on cybersecurity,” Wedbush Dan Eve analyst He wrote in the investor memo When the deal was common for the first time last year. “This would give Google an advantage over a number of cloud publishing operations and increase the entry of cybersecurity cloud with less than 50 % of work burdens and not on the cloud worldwide.”

But the deal does not come without its risks. Google, Alphabet, agreed to 3.2 billion dollars in reverse termination fees, according to Report from Financial timesWhich is called the amount “of the highest rates ever.” Dwarfs Edoubi billion dollars paid to Figma After giving up its acquisition of $ 20 billion and The amount of $ 94 million, Amazon, was paid to IROBOT.

Even with President Donald Trump in his post, Google is still expected to attract the audit of federal organizers. Andrew Ferguson said Trump’s choice to the Chairman of the Federal Trade Committee, in February note It will keep Integration instructions that were placed under FTC led by Lina Khan in 2023. However, Ferguson indicated that he is “more open to settlements to solve concerns about proposed merger, rather than sue to prevent deals that can be problematic in each case,” such as I mentioned before Wall Street Magazine.

Google is also in the midst of the anti -monopoly issue that can force the company to sell Chrome, which is a federal recommendation by Judge Amit Mihta It was reaffirmed earlier this month. A separate anti -monopoly experience, which accuses Google of monopolizing the advertising technology market, It ended late last year. With its acquisition of Wiz, Google will inherit Patent violation lawsuit It faces start starting from Cloud Cyblesecurity Company. In the lawsuit, Orca Wiz is accused of “continuous and unauthorized use of patented ORCA techniques.”

Regardless of potential legal problems, Google has struggled to integrate major acquisitions in the past, such as $ 12.5 billion Buy motorola Mobility In 2012, which was largely seen as a failure. Later, the acquisition of the nest of $ 3.2 billion Restructuring chaos and The departure of the founder of the brand Smart Home And the former CEO.

Google betting of $ 32 billion is that the opportunity here is much larger than any of these concerns – WIZ can put Google services on the map at a turning point for cloud computing and AI.