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If Google (NASDAQ:GOOG) (NASDAQ:GOOGL) does in fact acquire cybersecurity startup Wiz, it could have a huge ripple effect for both the company’s cloud unit and potentially lead to further deals in the space, Wedbush Securities said.
“For Google this would be a shot across the bow at Microsoft and Amazon making a major bet on the cyber security space to complement its flagship GCP offering in the cloud,” analyst Dan Ives wrote in an investor note. “This would give Google an edge on a number of cloud deployments and further monetize the cyber security cloud space with still less than 50% of the workloads not on the cloud globally. After falling behind Microsoft in the cloud arms race we have seen major traction from Google over the past year under Kurian around cloud success along with its core AI strategy.”
Adding Wiz to its portfolio of companies would also allow Google to capture more of the $1T market in cybersecurity, a space that has routinely seen companies like Palo Alto Networks (PANW), Crowdstrike (CRWD), CyberArk (CYBR), Cloudflare (NET), Snyk, Checkpoint (CHKP), Okta (OKTA), Tenable (TENB) and others as major players, Ives added.
In September 2022, Google completed its acquisition of cybersecurity firm Mandiant, which was previously part of Fireye.
Any deal between Google and Wiz, which could be announced as soon as this week, could also lead to further merger activity in the cybersecurity space, Ives posited.