Google’s Potential $23B Wiz Acquisition Would Be ‘Monumental’: Partners

The reported effort by Google to beef up its cloud and AI security offerings by potentially acquiring Wiz shows how central cybersecurity has become in the tech industry, solution provider executives tell CRN.

Whether or not Google’s reported efforts to acquire cloud security unicorn Wiz pan out, the apparent willingness by the tech giant to pay $23 billion for a four-year-old startup shows just how central cybersecurity has become in the tech industry, solution and service provider executives told CRN this week.

“This is monumental — simply because it's showing that they're truly focusing not just on their future, but the future of what’s going to be required [in security],” said Seth Kilander, founder and CEO of Denver-based Ki Security and Compliance Group.

Earlier this week, multiple media reports pointed to advanced talks that could see Google parent Alphabet acquiring Wiz for $23 billion, which would be the company’s largest acquisition to date. Google and Wiz did not respond to requests for comment.

There are numerous implications in the deal for both the channel and the IT industry as a whole, according to solution and service provider executives.

Dave Monk, CEO of ArcSource Consulting Inc., a Google Cloud partner based in Albany, Calif., said that Google’s cloud infrastructure business would get a major boost from the acquisition of Wiz.

“This is probably a good way for them to carve out additional cloud infrastructure deals,” Monk said. “It’s a good move for them.”

For Google partners, meanwhile, “this would be a great opportunity for bundling,” said Monk, who noted that his firm has seen significant interest from clients in Google Workspace as well as Google Cloud compute.

Rosana Filingeri, vice president of sales for Cybersafe Solutions, a Melville, N.Y.-based MSSP, said the potential Wiz deal is a prominent example of how the tech industry giants are increasingly making big security moves — and competing heavily as cybersecurity vendors in their own right.

Google, for instance, previously spent $5.4 billion to acquire incident response powerhouse Mandiant in 2022 and had made several acquisitions prior to that while building out its portfolio of security tools, Filingeri said.

Wiz, as a specialist in cloud and AI security, “is the next piece of the puzzle for Google,” she said. “There's obviously a gap. I believe that this would be the next step in filling that.”

Meanwhile, Microsoft in recent years has made its own major strides and investments in its security offerings, Filingeri noted.

Fast-Growth Startup

Founded in 2020, Wiz has seen surging growth essentially from the get-go with its offering that accelerates the delivery of visibility and security for cloud environments. More recently, Wiz has also doubled down on providing native AI security capabilities with its AI-SPM (AI security posture management) offering.

Wiz reached $100 million in annual recurring revenue (ARR) by mid-2022 and, earlier this year, said its ARR had surpassed $350 million.

With the potential acquisition price tag of $23 billion for Wiz, the centrality of security to the future of the IT industry can’t be ignored, solution provider executives said. “It is such a big acquisition for such a new company,” Kilander said.

Dhaval Shah, CISO and CTO of Rainbow Secure, a Google partner based in Old Bridge, N.J., said there’s also no question Google is potentially signaling how serious it is about becoming a bigger player in the security vendor space.

“I think it’s a smart move,” Shah said. “This would give Google an edge in the security market.”

The reported acquisition price would be nearly twice the valuation that Wiz had achieved in May, in connection with raising $1 billion in new funding.

In February, Wiz Co-founder and CEO Assaf Rappaport told CRN that the company is making its channel efforts a top priority in 2024, as it looks to enable faster partner-driven growth in cloud and AI security.

“In cybersecurity partners are super, super important in the success of a company. So we’ve always [seen that] this has huge potential for us to tap into. I think there is so much more we can do,” Rappaport said in the interview.

Antitrust Concerns

Hanging over the potential deal is the fact that antitrust actions by the U.S. government and European authorities have increased against tech giants Google, AWS and Microsoft in recent years. Global regulators have indicated a growing aversion to large technology companies getting bigger and forming monopolies through acquisitions.

However, Bank of America analyst Justin Post said Google’s potential acquisition of Wiz might be a deal that is easier to swallow for regulators, given that Google Cloud has less than 20 percent of cloud market share globally.