Google’s parent company, Alphabet, is set to acquire the Israeli cybersecurity startup Wiz for a staggering USD 32 billion (approximately Rp 529 trillion). This monumental deal, expected to close in 2026, represents Alphabet’s largest acquisition ever, dwarfing its previous record—the USD 12.5 billion purchase of Motorola Mobility in 2012.
The sheer scale of this acquisition is remarkable. Even the breakup fee, at USD 3.2 billion, is among the highest ever recorded in corporate history, highlighting the significant commitment Alphabet has made to securing Wiz.
Alphabet’s pursuit of Wiz has been ongoing. In 2024, they offered USD 23 billion, but antitrust investigations stalled the deal. This latest, significantly larger offer reflects Alphabet’s determination to finalize the acquisition.
Strategic Importance for Google Cloud
Analysts believe this acquisition is crucial for Google’s competitiveness in the cloud computing market, particularly against rivals Amazon and Microsoft. The acquisition is primarily aimed at bolstering Google’s cloud security capabilities.
As Gil Luria of D.A. Davidson pointed out, “For Google to compete with Microsoft Azure for enterprise customers, they need to offer a deeper suite of software, including security software.” Wiz’s expertise in cloud security directly addresses this need.
Upon completion, Wiz will become part of Google Cloud, significantly enhancing Google’s cybersecurity solutions and offerings to its enterprise clients.
Political Considerations and Wiz’s Valuation
Alphabet seemingly believes the acquisition will receive approval from the Trump administration, despite President Trump’s previous pronouncements about increased scrutiny of Big Tech companies. The sheer size of the deal might sway the decision in Alphabet’s favor.
It’s interesting to note that Wiz’s valuation during a private funding round in May 2024 was only USD 12 billion, with annual revenue exceeding USD 500 million. This represents a substantial jump in valuation in less than a year, underscoring the rapid growth and perceived value of Wiz in the cloud security space.
The Implications of the Acquisition
The acquisition of Wiz signifies a major strategic move by Google to strengthen its position in the fiercely competitive cloud computing market. By acquiring Wiz, Google aims to enhance its cloud security offerings, attracting more enterprise clients and potentially closing the gap with leading competitors like Microsoft Azure and Amazon Web Services.
The high acquisition cost and hefty breakup fee showcase Alphabet’s conviction in Wiz’s technology and potential. It signifies a willingness to invest heavily in strengthening its cloud security infrastructure, recognizing its pivotal role in attracting and retaining enterprise customers.
This deal also highlights the growing importance of cybersecurity in the cloud computing landscape. The increasing sophistication of cyber threats necessitates robust security solutions, making companies like Wiz highly valuable assets in the current market environment. The success of this acquisition will depend on the seamless integration of Wiz’s technology into Google Cloud and the ability to deliver enhanced security services to its enterprise clients. Any challenges in integration or regulatory hurdles could impact the overall outcome of this significant investment.
The substantial increase in Wiz’s valuation from USD 12 billion to USD 32 billion in less than a year speaks volumes about the company’s growth trajectory and the market demand for its services. This rapid appreciation reflects the market’s recognition of Wiz’s capabilities and its potential to disrupt the cloud security sector. The deal sets a new benchmark for acquisitions in the cybersecurity sector and will likely influence future transactions in the market.
