Google today announced its intent to acquire cybersecurity start-up Wiz for a staggering $32 billion in an all-cash deal. This acquisition is one of the largest ever cybersecurity deals.

The Deal: A Closer Look

Google’s pursuit of Wiz was not without its challenges. Last summer, the cybersecurity startup rejected an earlier $23 billion bid, opting instead to pursue an IPO. However, Google remained persistent, with executives, including CEO Sundar Pichai and Google Cloud chief Thomas Kurian, maintaining open communication with Wiz leadership.

Despite competing offers from other bidders, Google eventually sealed the deal, offering a higher valuation that reflected Wiz’s revenue growth from $500 million to over $700 million in less than a year.

Notably, the deal includes a breakup fee exceeding $3 billion, an unusually high sum, demonstrating Google’s commitment to closing despite potential regulatory scrutiny. With this acquisition, Wiz will remain an independent unit within Google Cloud, continuing to provide security solutions for AWS, Microsoft Azure, and other cloud providers.

Why Google Wanted Wiz

Google Cloud has been playing catch-up with Microsoft Azure and AWS in the enterprise market. While Google has excelled in AI-driven cloud capabilities, cybersecurity remains a crucial differentiator in attracting enterprise customers.

Wiz, founded by Assaf Rappaport, Ami Luttwak, and Roy Reznik, specializes in cloud security posture management (CSPM) and runtime security, offering a platform that seamlessly integrates across multiple clouds. This aligns with Google’s broader multi-cloud strategy – and the realities of most enterprises – ensuring that enterprises using Microsoft and AWS don’t feel locked into a single vendor.

Wiz’s rapid growth, with projections to exceed $1 billion in annual recurring revenue later this year, presents Google with a high-margin business that complements its security-focused services, such as Mandiant, which it acquired in 2022 for $5.4 billion.

Quick Take

By acquiring Wiz, Google significantly strengthens its cloud security portfolio, positioning itself as a direct competitor to Microsoft’s Sentinel and AWS’s Security Hub. This deal may put pressure on Microsoft and Amazon to expand their own cybersecurity capabilities, potentially leading to further cyber M&A activity.

Here’s what we really like: Google’s commitment to keeping Wiz cloud-agnostic reassures customers that they won’t be forced into Google’s ecosystem. This is critical in an environment where enterprises almost universally adopt multi-cloud strategies, security solutions must work seamlessly across different providers. Wiz has been successful in this space and we’ll take Google at its word that it will continue to do so.

For enterprises, the deal means access to better-integrated cloud security solutions, while Google competitors like Microsoft and AWS will be forced to accelerate their own security advancements in response.

One thing is clear: cybersecurity is now at the center of the cloud wars, and Google’s $32 billion bet on Wiz is a testament to its long-term strategy.