Google’s potential $23 billion acquisition of Visa would be ‘monumental’: Partners

Reports of Google’s efforts to bolster its cloud security and artificial intelligence offerings with a potential acquisition of Wiz underscore the important role cybersecurity is playing in the tech industry, solution provider executives told CRN.

Whether or not Google’s reported bid to acquire cloud security giant Wiz proves successful, the tech giant’s apparent willingness to pay $23 billion for the four-year-old startup underscores the critical role cybersecurity plays in the tech industry, executives at solution and service providers told CRN this week.

“This is monumental — simply because it shows that they’re really focused not only on their future, but on the future of what’s going to be required (in terms of security),” said Seth Kilander, founder and CEO of Denver-based Ki Security and Compliance Group.

(Related: Wiz aims to launch ‘massive’ sales channel by hiring executives and recruiting partners)

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

According to executives from solution and service companies, this agreement will have numerous implications both for the sales channel and for the entire IT industry.

Dave Monk, CEO of ArcSource Consulting Inc., a Google Cloud partner based in Albany, California, said the acquisition of Wiz will significantly strengthen Google’s cloud infrastructure business.

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

For Google partners, meanwhile, “it would be a great opportunity to combine services,” said Monk, who noted that his company has seen significant customer interest in both Google Workspace and Google Cloud Compute services.

Rosana Filingeri, vice president of sales at Cybersafe Solutions, a Melville, N.Y.-based security services company, said the potential deal with Wiz is a prime example of how tech giants are increasingly taking big steps on security — and competing fiercely as full-fledged cybersecurity providers.

Google, for example, spent $5.4 billion in 2022 to acquire incident response company Mandiant and has made several acquisitions before that while building out its security tools portfolio, Filingeri said.

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

Meanwhile, as Filingeri noted, Microsoft has made significant progress and investment in its security offering in recent years.

A fast-growing startup

Founded in 2020, Wiz has experienced rapid growth right from the start with its offerings that accelerate the delivery of visibility and security for cloud environments. Wiz also recently doubled down on delivering AI-native security capabilities with its AI security attitude management (AI-SPM) offering.

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

With a potential acquisition price tag of $23 billion for Wiz, the centrality of security to the future of IT cannot be ignored, executives at the solutions provider said. “It’s such a big acquisition for such a new company,” Kilander said.

Dhaval Shah, chief information security officer and chief technology officer of Rainbow Secure, a Google partner based in Old Bridge, N.J., said there’s no doubt that Google is potentially sending a signal that it’s serious about becoming a bigger player in the security solutions provider market.

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

The reported acquisition price will be nearly twice the valuation Wiz achieved in May when it raised $1 billion in new financing.

In February, Wiz co-founder and CEO Assaf Rappaport told CRN that channel efforts will be a priority for the company in 2024 as it looks to enable faster growth in cloud security and AI with partners.

“In cybersecurity, partners are super, super important to the success of a company. So we’ve always (seen) that this has huge potential that we can leverage. I think we can do a lot more,” Rappaport said in an interview.

Antitrust concerns

The potential deal is looming over the fact that antitrust actions by the U.S. and European governments against tech giants Google, AWS and Microsoft have intensified in recent years, with global regulators citing growing antipathy toward big tech companies that are getting bigger and creating monopolies through acquisitions.

Bank of America analyst Justin Post, however, said a potential acquisition of Wiz by Google could be a deal easier for regulators to accept, given that Google Cloud has less than 20 percent of the global cloud services market share.