Google's parent company Alphabet is reportedly in talks to buy cloud security unicorn Wiz for about $23 billion, which would be its largest acquisition ever. The potential move would help Google strengthen its competitive position in both cloud computing and cybersecurity, and more broadly highlights the increasing importance of cybersecurity and the ongoing consolidation within the industry.

Wiz, which was founded in 2020, has seen its valuation soar to $12 billion after raising $1 billion in May. The startup said it achieved $350 million in annual recurring revenue (ARR) in 2023, serving over 40% of the Fortune 100. The startup is backed by venture capital firms including Sequoia Capital, Andreessen Horowitz, Index Ventures, and Lightspeed Venture Partners.

Wiz has partnerships with major cloud providers including Amazon Web Services (AWS), Microsoft Azure, and Google Cloud. It also plans to expand its headcount and add to its current base of over 900 employees across the United States, Europe, Asia-Pacific, and Israel.

“Our goals are ambitious as we aim for $1 billion in ARR while also setting our sights on a future IPO,” Wiz COO and President Dali Rajic told SDxCentral in an earlier interview.

Bolstering Google Cloud’s security portfolio Google's potential interest in Wiz follows its $5.4 billion purchase of cybersecurity defense and response vendor Mandiant in 2022. The Mandiant integration into Google Cloud is targeted at enhancing Google’s cybersecurity capabilities and compete more effectively with AWS and Azure.

Google Cloud also introduced the Gemini in Security Operations during the Google Cloud Next ’24 event, which integrates its generative artificial intelligence (genAI) capabilities with its security operations, Mandiant threat intelligence and Security Command Center services.

In adding Wiz to its portfolio, Google would further enhance its security offerings. Wiz's technology, which includes a cloud native application protection platform (CNAPP), provides visibility and security across multiple cloud environments.

Benefits for Google Cloud and Wiz customers For Google Cloud customers, a Wiz acquisition could potentially bring several benefits, including Wiz's deep visibility into cloud environments. This, integrated with Google Cloud and Mandiant’s existing security capabilities, could help them more effectively detect and prioritize threats.

Wiz customers could expect the following benefits:

• Enhanced security capabilities with access to Google’s advanced threat detection and response.
• Improved scalability by leveraging Google’s global infrastructure for better scalability and performance optimization.
• Better integration with Google Cloud and access to Google’s AI and machine learning capabilities as Google could integrate its AI technologies into Wiz’s platform to provide more automated security capabilities.

Cloud security competitive landscape The cloud security market is fiercely competitive. Gartner named 27 representatives in its market guide for CNAPPs report last year, including Aqua Security, Check Point, CrowdStrike, Lacework, Microsoft, Orca Security, Palo Alto Networks, Rapid7, Sysdig, Trend Micro, Wiz, and Zscaler.

There have been several big moves in the cloud security industry, including Fortinet recently announcing plans to acquire Lacework, and two cloud security unicorns – Aqua Security and Orca Security – recently announcing a partnership to integrate their runtime protection and visibility capabilities.

Google’s potential Wiz acquisition may change the dynamics of the cloud security market and highlights the ongoing trend of consolidation in the cybersecurity industry.