The massive acquisition of Israeli cloud security startup Wiz has become the talk of the day within the realms of high-tech, cybersecurity and technology in general.
At a valuation of $32 billion, this is the largest exit in the history of the Israeli hi-tech industry, Google and even the entire cybersecurity field.
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Wiz founders Yinon Costica, Assaf Rappaport, Ami Luttwak and Roy Reznik
(Photo: Avishag Shaar-Yashuv)
The previous record for the largest acquisition of a cybersecurity company was Intel’s purchase of McAfee in 2010 for $7.8 billion. So why did Google agree to acquire Wiz for a price over four times higher?
The answer is simple: According to various reports, Google’s goal is to use Wiz as the foundation for building "Google Security," its unified cybersecurity company. As things stand, Google already has several cybersecurity divisions, including the cyber-intelligence company Mandiant, its cybersecurity research division Project Google Zero, the cybersecurity services division of Google Cloud and other smaller departments spread throughout the company.
The idea of consolidating all its cybersecurity activities under one umbrella is not far-fetched. Microsoft successfully built a cybersecurity business worth tens of billions of dollars annually through a similar unification strategy.
Interestingly, Microsoft’s cybersecurity division also originated from acquisitions, including the Israeli startups Adallom (founded by current Wiz CEO Assaf Rappaport) for about $300 million and Secure Islands, founded by brothers Aki and Yuval Eldar.
Google has wanted to enter this field for a long time. But why choose Wiz? The main reason is that Wiz's technology fits Google like a glove. Wiz provides a solution that secures cloud computing systems—a platform that operates without requiring installation on the server it protects. Wiz's software allows organizations using cloud services to gain a comprehensive view of their work environments. It also identifies risks, such as security vulnerabilities, misconfigurations and authentication issues.
However, its main advantage is that the product works seamlessly across the primary cloud platforms of Amazon and Microsoft, making it a critical asset. The product Microsoft acquired through its purchase of Adallom offered a similar solution, but Wiz's version is on steroids.
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In other words, Google is acquiring a much more advanced product than what Microsoft purchased, which will enable Google to consolidate all its cybersecurity operations under one umbrella and compete effectively with Microsoft. Google can offer a comprehensive solution to its cloud customers or customers of other cloud providers, as Wiz’s product works across all platforms.
Cloud computing has become a strategic and essential business nowadays. Many cyber incidents and security breaches stem from vulnerabilities in cloud services, and even Google has suffered from such issues. Therefore, it’s not surprising that the company is interested in creating a division that addresses these problems while also offering these services to others.
There’s another reason for this acquisition: artificial intelligence (AI). The AI sector requires a doubling of cloud infrastructure since these systems operate chatbots and AI services behind the scenes.
Additionally, the training processes for these systems are conducted on cloud servers. These are highly sensitive data, and it is crucial to secure them or provide efficient security services to their operators. This acquisition is expected to make Rappaport one of Google’s key figures in the coming years.
According to the deal details, Google plans to keep Wiz's headquarters in Israel and retain a significant portion of its 1,800 employees. Essentially, Google is acquiring an entire cybersecurity company in a single transaction.
Rappaport skillfully expanded Wiz and strengthened it through a series of acquisitions of Israeli startups, adding a variety of advanced capabilities. The company can now address most potential cybersecurity scenarios and provide a kind of "immunity" to issues before they lead to breaches.
Combined with the intelligence capabilities of Mandiant, the malware detection of Virus Total (another Google company) and the advanced vulnerability research of Project Zero, a new business division has been born with a very promising future.