With Amazon and Microsoft’s ever-growing fog computing companies, Google might close the gap thanks to its purchase of Wiz.
With Amazon and Microsoft’s ever-growing fog computing companies, Google might close the gap thanks to its purchase of Wiz.
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Google’s most recent merger is its most expensive to date, and it may also be its riskiest consolidation. The research giant announced on Tuesday that Wiz, a business for cloud safety, had been acquired for$ 32 billion. It’s a big gamble that Wiz may help improve Google’s cloud business, which generates significantly less revenue than its main rivals’. However, Google must overcome real difficulties in integrating this pricey acquisition and avoiding regulation issues regarding what will undoubtedly be a significant buy in order to accomplish that.
The Artificial sky gold rush has brought in significant profits for both Microsoft and Amazon, with revenues of$ 105.4 billion and$ 107.6 billion, both, for the fiscal year 2024. Google, on the other hand, has a small market share, surpassing$ 43 billion in 2024 in fog income. Google may have found a way to close the gap with its fellow tech titans, even if it has to spend billions of dollars it, as the AI growth is showing no signs of slowing down.
” Security is a important goal for CEOs and federal officials around the world, but the scenery is changing,” said Google CEO Sundar Pichai during an investor contact. ” Vulnerabilities are accelerating in terms of the influence and speed. AI brings new challenges, but also new chances. Together, we think Google Cloud and AI can amplify organizations ‘ ability to improve their security. The agreement will place Wiz under the Google Cloud awning.
Wiz backed out of discussions with Google to buy it for$ 23 billion last year because it feared national regulators would back away and plans to launch an initial public offering. The companies may be able to build a route past regulatory obstacles with the more merger-friendly Trump management in place.
Wiz, which was founded in 2020, has quickly grown to be one of the world’s fastest-growing technology firms. The company’s management staff has a track record of success in cloud companies: Wiz CEO Assaf Rappaport and some members of his professional team were also responsible for Adallom, a cloud security company that Microsoft purchased for$ 360 million in 2015 and later changed its name to Microsoft Defender for Cloud Apps.
In the ever-expanding AI market, Wiz is making a name for itself in combination with what Forbes describes as a “hyper-aggressive” approach to business and maintenance-free fog security software. It provides an agentless security solution, which means businesses don’t have to spend time deploying personal security applications or agents across every device they want to secure. It can be used to remotely monitor a fog environment, allowing experts to use a digital baby or a version of a fog setup to create the impact of potential threats.
Similar surveillance tools are provided by different businesses, such as CrowdStrike and Palo Alto Networks. However, Wiz’s implementation is unique. Anyone can become an agentless, Gartner’s vice president and distinguished researcher, Neil MacDonald, said last year. ” It’s how you piece together and create this digital twin design, identify, prioritize, and assist customers in reducing danger,” said Wuz.
Wiz also provides a user-friendly interface that MacDonald describes as one of” the best” in its category. A cloud setting is visually displayed in a online map that shows all connections in a cloud environment and how a breach might affect it, while another continually examines a cloud setup to find and identify risks. As big corporations and their customers leave their data to the cloud, whether it is for storage or to process requests with AI, these kinds of features will only gain in importance.
As a flurry of AI companies look for a cloud service, they may consider Google Cloud’s inclusion with Wiz. The company claims to offer” buyers of every size of business, from startups to Fortune 100s.” Rappaport increased the startup’s annual revenue from$ 1 million to$ 100 million in just 18 months in 2022 thanks to Wiz’s marketing success. Since wiz’s quarterly earnings of$ 350 million was reached, almost half of the Fortune 500 list’s top 100 companies use the software. The business raised$ 1 billion in May 2024, putting the company’s pricing at about$ 12 billion.
That vast crowd is a huge plus for Google. According to a 2024 statement from The Data, the research giant might use this merger as an opportunity to change some of Wiz’s clients to Google Cloud. OpenAI’s AI services are currently run by Microsoft Azure, while Anthropic, the Artificial business behind Claude, runs on both Google Cloud and AWS. Midjourney, another AI firm, opted for Google Cloud as its service. And now that Microsoft’s security practices are under increased investigation, it’s a good time for Google to get involved in the sky security game.
For Google to gain, customers don’t even need to select Google Cloud as their supplier. Google is establish itself as a security company beyond its cloud giving because Wiz integrates directly with the services offered by Google, Amazon, Microsoft, Oracle, and others. In addition to Wiz, Google’s expanding surveillance portfolio includes Chronicle, VirusTotal, and Mandiant. According to MacDonald,” Google wants to become a major business security vendor.” ” Wiz strengthens its standing as an organization security person.”
Wedbush scientist Dan Ives wrote in an traders note when the offer was first reported last year that” for Google this would be a picture across the arrow at Microsoft and Amazon, making a big bet on the computer protection space.” With less than 50 % of the loads not on the cloud worldwide, this would give Google an advantage in a number of fog deployments and help it further sell the cyber security cloud space.
The package comes with some drawbacks, though. According to a report from the Financial Times, Google’s parent company, Alphabet, agreed to pay a$ 3.2 billion reverse termination fee, which is considered “among the highest of all time.” It surpasses the$ 94 million Amazon paid to iRobot and the$ 1 billion Adobe paid to Figma after it abandoned its$ 20 billion acquisition.
Yet with Donald Trump in office, Google is also expected to face scrutiny from national regulators. In a February letter, Andrew Ferguson, Trump’s choice for the head of the Federal Trade Commission, stated that he would continue to follow the merger rules developed under the Lina Khan-led FTC in 2023. Ferguson has yet to make the comment that he is “more open to using towns to handle concerns about proposed mergers, rather than suing to prevent potentially dangerous deals in every example,” as The Wall Street Journal reported.
A proposal federal Judge Amit Mehta reaffirmed earlier this month that Google is also in the throes of an effective antitrust situation that may force the company to market Chrome. Late next year, a distinct competitive test that accused Google of monopolizing the market for advertising tech came to an end. Google will recoup the trademark infringement lawsuit the business is facing from the sky cybersecurity firm Orca with the purchase of Wiz. In the lawsuit, Orca accuses Wiz of “ongoing, and unauthorized use of Orca’s branded technology.”
Google has struggled to incorporate significant mergers in the past, such as the$ 1 billion order of Motorola Mobility in 2012, which was generally viewed as a failure. Apart from potential legal issues, Google has struggled to do so. Following that, Google’s$ 3.2 billion Nest consolidation led to a series of turbulent restructurings and the resignation of the intelligent home company’s founder and former CEO.
Google’s$ 32 billion guess is that Wiz could help position Google’s services at a turning point for AI and cloud computing, with the prospect here far larger than any of these worries.