How Cloud Security Acquisitions Are Changing the Tech Industry

You know what’s cooler than getting acquired for $23B? Walking away from the deal, waiting nine months, and then getting acquired for $32B—with a $3.2B termination fee if the deal doesn’t go through. That’s the story of Wiz and Google. I have to hand it to Google for its patience and persistence in making this happen. But we’re just getting started. I’ve been on my phone all day, fielding questions from customers who are trying to make sense of this deal. A lot of folks, including a number of reporters I talked to, are also wondering: What will Google do with Wiz? And why did they pay so much? That’s an easy answer. Google Cloud has already made significant investments in cybersecurity—SecOps through Chronicle, threat detection and incident response through Mandiant, and a thriving third-party marketplace with partners such as Palo Alto Networks. This move shouldn’t come as a surprise. Google has been working toward a unified cloud security and TIDR (threat intelligence, detection, and response) platform that runs on a single "security fabric." Wiz’s CNAPP platform and security graph will be critical in making cloud security a first-class citizen. As SoC automation accelerates, customers are looking for a modern CDR (continuous detection and response) solution—one that goes beyond traditional EDR/XDR or SIEM/SOAR models. They want a cloud-first approach to power their SoC, and that’s what’s driving the frenzy. And let’s not forget the bigger picture: Every dollar spent on cybersecurity, just like AI and analytics, translates into even larger spend on cloud services. Google would prefer that spending to happen on Google Cloud—not Azure or AWS. And that’s the concern shared by many people I spoke to. While Wiz has been a key Google Cloud partner, a significant portion of its customers are on Azure and AWS. Google’s experience with multi-cloud offerings through previous acquisitions, such as Looker, will be beneficial. Nevertheless, delivering cloud-native security solutions on cloud platforms outside its direct control introduces an entirely new set of complexities. Google's ability to navigate these challenges—while retaining Wiz’s existing Azure and AWS customers—will be crucial to making this acquisition successful in the long term. So far, Google has managed to maintain trust with their security ISV partners despite sizeably growing its first-party security portfolio. The ecosystem is thriving. But the big question partners I spoke to are asking: Is this a one-off acquisition, or the start of Google’s push to go all-in on security and build a security empire? It’ll be a while before this deal closes, and I’ll be watching closely. I’m also advising our CxO clients to do the same. Next month, I’ll be at Google Cloud Next and RSAC, digging into this with Google, customers, and partners. And people think cybersecurity is boring. Yes, it's $32B boring.

We've been talking a lot about platformization in cybersecurity. We're not talking enough about aggregation. Alphabet acquiring Wiz should have us all paying attention by now. Ben Thompson (Stratechery) brought the idea of Aggregation Theory to light in a series of articles about large tech companies. The core idea is this: Companies that create platforms capable of aggregating a large number of users and suppliers can bypass traditional gatekeepers to gain significant power and competitive advantage. Okay, sounds mildly terrifying...what does that mean for the cybersecurity industry? Cybersecurity companies (mostly) aren't the ones *doing* the aggregating — they are *being* aggregated. Cloud providers are beginning to offer cybersecurity products and services to customers in more flexible, easy-to-use pieces than ever before. For example, if an AWS customer wants to hire an MSSP or buy an EDR product, they can browse a list of companies on the AWS Marketplace and buy it directly. They may even have pre-committed cloud spend to use for the purchase. In more technical terms: Aggregators (cloud providers) are modularizing suppliers (cybersecurity product and services companies) and using control of customer demand (businesses using their cloud services) to control distribution of products and services (via marketplaces). This is a massive, massive change in both distribution and purchasing behavior. Being "aggregated" is totally fine as long as you recognize it's happening and generally understand the effects. Companies like CrowdStrike, CyberArk, Okta, and more are all super optimistic their marketplace growth. Wiz has been doing ~50% of its revenue from marketplaces. This can be done well, but it has to be intentional. This shift is going to keep impacting the cybersecurity industry in all kinds of ways. You thought Alphabet buying Wiz was big? We're just getting started.

I'm sure there will be a lot of thoughts today on Google's acquisition of Wiz. I believe this is a game changer for cybersecurity, startups and venture capital in general. Google’s $32B acquisition of Wiz isn’t just another big tech deal—it’s a defining moment for cybersecurity, cloud innovation, and startup valuations. For startups: This validates the massive market potential for security-first cloud solutions and the need for hyper-growth execution. The lesson learned is: stay focused on what you do great and then make it greater. Wiz exemplifies this in their execution. For VCs: It signals a continued appetite for late-stage M&A versus IPOs, proving that the right tech with the right traction can drive billion-dollar exits and it doesn't have to be through the public markets. For big tech: The competition to secure cloud environments is heating up, and strategic acquisitions are becoming the fastest path to leadership. The lesson? Security isn’t a feature—it’s foundational. The market is rewarding those who get it right. What are your thoughts on how this will shape future deals?

One of the biggest questions in M&A is: how do you value a company in an acquisition—and justify it? Google just made its biggest acquisition ever—Wiz for $32 billion. That’s a massive number. So how do you get there? Wiz’s growth has been phenomenal —$100M ARR in 2022, $350M in 2023, $500M+ in 2024, projecting $1B in 2025. Google acquired it for a 32x revenue multiple. That seems high but bear-in-mind Google already tried to buy Wiz for $23B last year—Wiz passed, looking to get to 1 billion in revenue and due to concerns about the regulatory environment at the time (which looks to be changing). Beyond anything else it's the strategic fit. Google has been lagging in cloud security (especially compared to AWS and Microsoft Azure its biggest competitors). Wiz gives google a cloud-native, agentless, multi-cloud security platform protecting agains threats that target the cloud infrastructure - as an example threats targeting AI training data that is stored in the cloud. 32x forward revenue sounds aggressive, but when you factor in growth, market position, and strategic alignment, it makes a lot of sense. Huge congrats to the Wiz team on an incredible achievement—and to Google for a bold, strategic move. #MergersAndAcquisitions #M&A #TechAcquisition #Cybersecurity #CloudSecurity #Google #Wiz #TechNews

Google’s biggest deal ever - $23B for Wiz’s tech. Here's why it matters: Wiz, founded in 2020 by Assaf Rappaport, Ami Luttwak, Yinon Costica, and Roy Reznik, has rapidly grown to become a leader in cloud security. The founders, formerly of Adallom, previously sold their company to Microsoft for $320 million. This acquisition marks Alphabet’s largest deal ever, surpassing its $12.5 billion purchase of Motorola Mobility in 2012 and its $5.4 billion acquisition of Mandiant. The deal is a strategic move to bolster Google Cloud's cybersecurity capabilities. Wiz's technology enables comprehensive scanning of cloud environments, identifying vulnerabilities across various layers, including network structures, access permissions, and configuration errors, through a simple API interface. The company’s Annual Recurring Revenue (ARR) hit $100 million within 18 months of launching its products, showcasing its rapid growth and market impact. By 2023, Wiz achieved a sales volume of $350 million, making it the fastest-growing software company globally. Wiz recently raised $1 billion at a $12 billion valuation, emphasizing its robust market position. The company's notable acquisitions include Gem Security and Raftt, further enhancing its cloud application security platform. Alphabet’s acquisition of Wiz is not just about expanding its cybersecurity portfolio. It's a strategic "shot across the bow" at competitors like Microsoft and Amazon, enhancing Google Cloud's attractiveness to corporate and government clients. This deal is set to break records in Israeli high-tech, surpassing Intel’s $15.3 billion purchase of Mobileye. The founders of Wiz are poised to gain $2.3 billion each from this deal, with significant tax contributions to Israel’s economy. Wiz’s platform integrates findings from cloud, application, and software layers, providing a unified view of risks. This comprehensive approach helps security teams prioritize and mitigate complex cloud threats effectively. With over 50% of global workloads still not on the cloud, Alphabet's acquisition of Wiz positions it to capture a significant market share, driving forward its cloud security and deployment capabilities.