After Google’s $32 Billion Wiz Deal, Will Entrepreneurs Flock To Cybersecurity?

Already a hot area for startup activity over many years now, cybersecurity could now see ‘more innovators wanting to become the next Wiz,’ according to Gartner’s Neil MacDonald.

Google’s unprecedented acquisition deal for fast-growing cloud and AI security vendor Wiz is likely to give a boost to an already surging area of entrepreneurship, according to Gartner’s Neil MacDonald.

Without a doubt, cybersecurity has been a hot area for startup activity for a number of years at this point. But the sector has never seen a deal before like Google’s planned $32 billion acquisition of five-year-old Wiz.

“The sheer size of this deal has gotten everybody’s attention,” said MacDonald, vice president and distinguished analyst at Gartner, noting that it’s the largest acquisition deal to date of a standalone cybersecurity vendor.

The deal is also Google’s largest acquisition in history and, by way of comparison, is nearly 6X the size of the tech giant’s $5.4 billion acquisition of cybersecurity stalwart Mandiant in 2022.

Assuming that the acquisition closes, the massive deal is likely to “spawn more innovators wanting to become the next Wiz, through startups and trying to target emerging use cases,” MacDonald said.

Even with the thousands of vendors already operating in the cybersecurity space today, the continued evolution and intensification of cyberattacks — as well as key trends such as the widespread adoption of GenAI — mean there is still plenty more for cybersecurity entrepreneurs to do, he said.

“There’s a lot of innovation left to be had in information security,” MacDonald said. “If anything, [the Google deal] gives a boost to these smaller firms that want to become the next Wiz.”

In addition to AI and its variety of security-related angles, providing protection against disinformation — as well as growing areas such as exposure management and preemptive cyber defense technologies — are key categories where advancements are needed from the industry, he said.

“That’s the great thing about information security. There’s always new technologies that need to be secured,” MacDonald said.

Cybersecurity startup entrepreneurs can take a variety of lessons from the Wiz example, according to Shardul Shah, a partner at Index Ventures and an early Wiz investor.

In an interview with CRN last year, Shah, who helped to lead Wiz’s Series A funding round in 2020, said that the company’s founders quickly “made a number of critical decisions that set themselves up to be really different.”

These included focusing on building an enterprise-grade product from the get-go while also understanding what a business’ requirements would be — including in critical areas such as agility, Shah said.

Notably, Wiz’s founding team also made some product development decisions that were crucial, including building a user-friendly product that could rapidly provide improved cloud visibility into security issues.

“The product is simple, but it’s not simplistic,” Shah said. “They definitely made some decisions from an architectural perspective that were extraordinarily valuable, including [on the] graph-based database — but [also] with an eye toward building a platform with multiple products that could be used in concert.”

Another takeaway from the Wiz example is around the value of working with the channel from an early point, according to Cesar Enciso, founder and CEO of San Diego-based system integrator Evotek and an early partner of Wiz.

Teaming with the channel, according to Enciso, helped Wiz to achieve its stunning growth pace — going from zero to $100 million in annual recurring revenue during its first 18 months in the market, before surging to $500 million in ARR last year.

Enciso has no doubt that the Google acquisition will influence new startup activity focused on emerging areas of cybersecurity, as Wiz did with cloud security when the company was founded in early 2020.

In the wake of the Wiz-Google deal, “I do believe that we’re going to get more entrepreneurship in the cybersecurity space,” he said.

Evotek focuses heavily on emerging technologies, which constitute 75 percent of the company’s revenue, Enciso noted. And with all of the unsolved issues remaining in cybersecurity, “that’s why I’m so excited about emerging tech.”