LDN - Business

Google deal for 'hot market' cyber firm Wiz would bolster cloud security

[July 16, 2024] By Zeba Siddiqui

SAN FRANCISCO (Reuters) - If Alphabet's Google is successful in its effort to buy cloud security company Wiz, it would bolster its cloud security offerings for large organizations, a hotspot for hackers, and help it take on cloud rivals Amazon.com and Microsoft, experts said.

Alphabet is in advanced talks to acquire Wiz, a person familiar with the matter said on Sunday, in an up to $23 billion deal that would be Google's most expensive acquisition and provide it with cybersecurity products that defend against ransomware gangs wreaking havoc on large enterprises.

"There is a hot market for cloud security," said Jerome Seguera, a senior intelligence analyst at the cybersecurity firm MalwareBytes, adding that Wiz gives customers "great visibility into their assets in a straightforward way."

Wiz offers 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 cyber firm Mandiant for $5.4 billion.

"I think they are trying to compete with Microsoft and to a smaller extent AWS (Amazon Web Services)," said Marc Bleicher, chief technology officer of the security firm Surefire Cyber.

"Wiz is one of only a few who address a big chunk of the cloud security market in one platform," Bleicher said.

Wiz was founded in 2020 at the height of the coronavirus pandemic, primed to benefit from the move towards remote work and the shift by organizations to cloud environments from desktops. Most large organizations have also shifted to storing their data on the cloud over the years, but that has come with security risks - especially as companies expand and become more complex.

Its founders, former Israeli army intelligence members, earlier founded another cloud security firm named Adallom that Microsoft bought for $320 million in 2015.

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People walk next to a Google logo during a trade fair in Hannover Messe, in Hanover, Germany, April 22, 2024. REUTERS/Annegret Hilse/File Photo

Headquartered in New York, the company has grown rapidly since then. Only two months ago, at the RSA cybersecurity conference in San Francsico, Wiz said it was valued at $12 billion. It now expects annual organic revenue of $1 billion in 2025 and has raised nearly $2 billion in venture capital investment in total, said a person familiar with the Google deal talks, declining to be named.

The Wiz buyout talks come as the pace of global dealmaking in cybersecurity has significantly picked up in 2024. There were 120 global cybersecurity deals announced in the first half of this year, accounting for $12.4 billion in deal value, compared to 137 such deals last year, or $4.8 billion in deal value, according to data from the financial information firm Dealogic.

Dave Dewalt, founder of the cyber-focused venture capital firm NightDragon, said Wiz's growth is the result of strong marketing and being "at the right place, at the right time, with the right product."

DeWalt, former chief executive of cybersecurity firm FireEye, said cloud security is the most important and fastest-growing part of cybersecurity, driven by increasing attacks on large organizations.

"The stakes are exponentially higher in the cloud. So therefore, the security needs to be exponentially stronger, and (there's) more revenue from it," he said, adding that Palo Alto Networks and Crowdstrike had also beefed up their cloud security offerings in recent years.

(Reporting by Zeba Siddiqui in San Francisco, James Pearson in London, Milana Vinn in NEW YORK, and Krystal Hu in San Francisco; Editing by Chris Sanders and Stephen Coates)

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