In an unprecedented twist in the technology sector, Google's parent company Alphabet has announced the next step in its takeover strategy: the huge sum of 30 billion dollars is to be put on the table for the IT security specialist startup Wiz. But what is behind this gigantic sum, and why is the security market suddenly becoming so hotly contested?
A step that could change the IT security landscape
The purchase of Wiz would mean a major upheaval for Alphabet. It would be by far the biggest purchase in the company's history - the biggest takeover deal to date, the 12.5 billion dollars for Motorola Mobility in 2012, quickly seems like small change in comparison. So why so much money for a startup that is not even listed on the stock exchange?
The reason is obvious: Wiz is a specialist in cloud security and has focused on developing software for real-time threat detection and prevention. With the help of artificial intelligence (AI), Wiz's technology can immediately detect potential risks in the digital space, which would be an invaluable advantage, especially in Google's increasingly complex cloud infrastructure.
Wiz is already an established player in the security sector and has won well-known customers such as Amazon, Microsoft and Google itself. The company's founders sold another security company, Adallom, to Microsoft back in 2015. It is also no coincidence that Alphabet is now relying on these experts to make its cloud services even more secure.
A financial risk or the future of IT security?
Of course, buying such a large sum for a start-up is not without risk. Just a year ago, the founders of Wiz turned down an offer of 23 billion dollars to plan an IPO instead. But with the new offer of 30 billion dollars, Alphabet is showing that it is prepared to do whatever it takes to become the leader in this field.
It is still unclear how the regulatory authorities will react to the deal. In the past, the US competition authorities have scrutinized takeovers of tech giants such as Alphabet. However, the political change in the US could increase the chances of a quick approval. In particular, the changing attitude in US politics, which is increasingly focused on competition issues under President Biden's administration, could make the deal more difficult.
The next giant on the list: What does this mean for the market?
What the deal means for the market as a whole is also exciting. If Alphabet completes the biggest takeover of all time with Wiz, the entire security market is likely to change rapidly. Google would not only massively strengthen its own service, but also put pressure on the competition. The cloud security sector, which is already hotly contested, would become even more intense as a result of the acquisition.
This step could also be a signal for competitors such as Microsoft or Amazon to invest even more in their security infrastructure in the future in order to keep up with the overpowering Google heavyweight.
Gigantic deals like these make us think!
Alphabet's planned purchase of Wiz is an impressive example of the ever-increasing concentration of power in the technology sector. As Google and co. continue to merge and gain market share, the question arises: where is the competition? Shouldn't more smaller, independent players be able to survive on the market, especially in the IT security sector, which is so crucial for protecting our data?
The answer to this question will be revealed by the course of the negotiations. But one thing is certain: if Google continues to go on such an aggressive buying spree in the coming years, we could soon see a technology landscape characterized more by a few large companies than by a large number of innovative start-ups. And that might not only have advantages for the competition and consumers in the long term.
