technology
Google's deal to buy cybersecurity firm Wiz could boost cloud computing security
Posted on: Tuesday, July 16, 2024 20:30:52 PST
SAN FRANCISCO (Reuters) – If Alphabet Inc's Google succeeds in its bid to buy cloud security firm Waze, it would bolster its cloud security offerings for large enterprises, provide a hotspot for hackers and help it fend off cloud rivals Amazon.com Inc and Microsoft Corp, experts said.
Alphabet Inc. is in advanced talks to buy Waze Inc. in a deal valued at up to $23 billion that would be Google’s most expensive acquisition and provide it with cybersecurity products that protect against ransomware gangs that wreak havoc on large companies, a person familiar with the matter said Sunday.
“There’s a hot market for cloud security,” said Jerome Seguera, a senior intelligence analyst at cybersecurity firm MalwareBytes, adding that Wiz gives customers “great visibility into their assets in a real-time way.”
Wiz provides tools that allow organizations to scan their entire infrastructure and specific software for threats.
Google has been steadily expanding its cybersecurity offerings in recent years. Two years ago, it bought the popular cybersecurity firm Mandiant for $5.4 billion.
“I think they are trying to compete with Microsoft and to a lesser extent with AWS (Amazon Web Services),” said Mark Blecher, chief technology officer at security firm Surefire Cyber.
“Wiz is one of the few companies that addresses a large portion of the cloud security market in one platform,” Bleicher added.
Founded in 2020 at the height of the COVID-19 pandemic, Wiz was poised to capitalize on the shift toward remote work and organizations’ shift from desktops to cloud environments. Most large organizations have moved to storing their data in the cloud over the years, but this has come with security risks — especially as businesses grow larger and more complex.
The company's shares rose 2.5% after Morgan Stanley called it a “top pick.”
Its founders, former members of the Israeli military intelligence, had previously founded another cloud security company called Adalom, which Microsoft bought for $320 million in 2015.
The company is headquartered in New York and has since experienced rapid growth.
Just two months ago, at the RSA cybersecurity conference in San Francisco, Wiz said it had a market value of $12 billion. The company now expects $1 billion in annual organic revenue in 2025 and has raised about $2 billion in venture capital investment in total, according to a person familiar with the deal talks with Google, who declined to be identified.
The Wiz acquisition talks come as global cybersecurity dealmaking is set to pick up significantly in 2024. There were 120 global cybersecurity deals announced in the first half of this year, worth $12.4 billion, compared to 137 such deals last year, or $4.8 billion in deal value, according to data from financial intelligence firm Dealogic.
Wiz's growth is the result of strong marketing and being “in the right place, at the right time, with the right product,” said Dave DeWalt, founder of Internet venture capital firm NightDragon.
Cloud security is the most important and fastest-growing part of cybersecurity, driven by increasing attacks on large organizations, said DeWalt, the former CEO of cybersecurity firm FireEye.
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