Google Just Went All-In on Cybersecurity. Will It Work?

Google has made its largest acquisition to date, signing a $32 billion all-cash deal to acquire cybersecurity startup Wiz. The move signals an aggressive expansion of Google’s cloud business, marking a sharp turn from its traditional focus on search and online advertising. While the deal has been praised for its strategic value, it also raises significant questions about regulatory hurdles and Google’s ability to compete with Microsoft in the cybersecurity space.

This acquisition easily surpasses Google’s previous record-breaking purchase of Motorola Mobility for $12.5 billion in 2012. Despite its immense valuation, Wiz remains relatively unknown to consumers. However, among enterprises, Wiz has built a strong reputation as a leading cloud security provider, offering a platform that enables companies to secure cloud environments across AWS, Azure, Oracle, and Google Cloud. 

Founded just five years ago by Assaf Rappaport and his co-founders, Wiz became a dominant player in the cloud security space. The company was last valued at $12 billion, and in July 2023, it rejected a $23 billion takeover bid from Google, citing ambitions to go public. However, those IPO dreams never materialized, and negotiations resumed in August, ultimately leading to this deal.

Wiz has seen growth, with recurring revenue soaring from $100 million to $350 million within two years. The company is projected to hit $1 billion in annual revenue in 2025. Its technology offers businesses a seamless way to monitor and secure cloud environments without requiring installation on individual servers. This level of flexibility has made it a critical asset, particularly as companies increasingly rely on multi-cloud strategies.

For Google, acquiring Wiz is not just about expanding Google Cloud’s security capabilities, it is about competing with Microsoft, which has built a multi-billion-dollar cybersecurity division largely through acquisitions. Microsoft’s own cybersecurity push started with buying Israeli startups like Adallom, Secure Islands, and Hexadite. The irony is that Rappaport himself co-founded Adallom before selling it to Microsoft. Now, his latest company, Wiz, is at the center of Google’s counteroffensive in cloud security.

Reports suggest that Google plans to use Wiz as the foundation for “Google Security,” a unified cybersecurity division consolidating various existing operations. This division would incorporate Mandiant (acquired for $5.4 billion in 2022), Google’s Project Zero, and other cloud security initiatives. The goal is clear: challenge Microsoft’s dominance and position Google as the leader in enterprise cybersecurity.

Security has long been considered a weak point in Google’s cloud offerings. By acquiring Wiz, Google gains a top-tier cloud security platform that instantly strengthens its position. Expect Google to aggressively market itself as the most secure cloud provider, putting pressure on AWS and Microsoft to respond.

Microsoft, however, is no stranger to cybersecurity. It already boasts a robust security portfolio generating more than $15 billion in revenue. Unlike AWS, which primarily secures its own cloud, Microsoft Defender for Cloud and Defender for Endpoint support Windows, Unix, and Mac environments, making it a strong cross-platform player.

With both Wiz and Mandiant under its belt, Google is now a serious contender in the high-end enterprise security market. Until now, Google Cloud was often overlooked by CISOs in favor of AWS and Microsoft. However, this acquisition changes the landscape, making Google a viable competitor for large enterprises that demand best-in-class security.

However, the deal is bound to face intense regulatory scrutiny. Alphabet, Google’s parent company, is already embroiled in multiple antitrust battles with the U.S. government. The Justice Department has sued Google in two separate monopoly cases, one targeting its search engine business and another seeking to break up its digital advertising operations. Regulators have been cracking down on corporate consolidations, as seen in their recent move to block Hewlett Packard Enterprise’s $14 billion acquisition of Juniper Networks. With Google already found guilty of maintaining an illegal monopoly in search, the Wiz deal will likely undergo extensive regulatory review before it can close in 2026.

Last time around, Alphabet’s $23 billion offer failed to lead to an agreement after members of both companies’ boards expressed skepticism about whether the deal could get past regulators. But that was under former president Joe Biden. While Donald Trump’s White House has signaled it will not roll over easily on merger approvals, this deal shows the companies are willing to test the risk appetite of the new administration. 

To mitigate these risks, Alphabet has agreed to a substantial $3.2 billion break-up fee should the deal collapse due to regulatory challenges.

Despite potential regulatory hurdles, Google sees Wiz as a crucial investment in its long-term cloud strategy. Sundar Pichai, Google’s CEO, justified the acquisition by highlighting the accelerating pace of cyber threats and the growing role of AI in both attacks and defenses.

“The pace and impact of breaches are accelerating. A.I. brings new risks, but also new opportunities,” Pichai said in a conference call.

This aligns with a broader industry trend where cloud security is becoming inseparable from AI. Cloud computing powers the infrastructure for AI models, and securing these systems is now a critical concern. Wiz’s ability to monitor vulnerabilities across multiple cloud providers makes it an attractive asset for Google, which has been trying to strengthen its cloud business against competitors like Amazon and Microsoft.

Google’s ambitions to move beyond its core advertising business and establish itself as a major player in cloud security. However, the price tag is over four times what Intel paid for McAfee in 2010. 

If approved, the deal will make history as the largest acquisition in the Israeli tech sector and in the cybersecurity field at large. Google has committed to keeping Wiz’s headquarters in Israel and retaining most of its 1,800 employees, ensuring continuity while integrating its technology into Google Cloud’s operations.

If the acquisition goes through, Google could finally have a credible response to Microsoft’s cybersecurity juggernaut. If it faces regulatory roadblocks, however, it will be a costly lesson in the limits of big-tech expansion.