The ink is barely dry on Alphabet's $32 billion acquisition of cloud security unicorn Wiz in March 2025, yet the transaction has already become a Rorschach test for the market.
To the optimists, it is a masterstroke, a decisive move by Google to secure its footing in the AI-driven cloud wars, finally answering the dominance of AWS and Azure. To the skeptics, it is a desperate overpayment, a textbook example of the "Winner's Curse" where the prize of winning the auction comes at the cost of potentially destroying the asset, and the shareholder value.
The Context
To understand the magnitude of this deal, one must look beyond the headline number. Wiz is not merely a successful startup; it is a phenomenon. Founded in 2020 by Assaf Rappaport and his team of former Microsoft executives (the same team that built Adallom), Wiz grew to $350 million in annual recurring revenue (ARR) by 2024. Their secret sauce was not just their AI-native scanning technology, but their architectural neutrality. By sitting agnostically between AWS, Azure, and Google Cloud, Wiz became the Switzerland of cloud security-trusted by 40% of the Fortune 100 because it favoured no single sovereign.
The acquisition process was a classic product of the standard M&A Playbook. After initial talks stalled in mid-2024 due to the regulatory "chilling effect" of the Biden administration's FTC, the window reopened in early 2025. With the Trump administration signalling a return to a more permissive M&A environment, the brakes came off. What followed was a frenzy. The auction drew interest not just from strategic giants like Microsoft, but from Private Equity powerhouse firms like Thoma Bravo and Blackstone, creating a high-pressure competitive tunnel.
Alphabet emerged as the victor, but the cost of victory was steep: $32 billion. This represents a staggering 91x revenue multiple-a figure that defies traditional financial gravity and suggests that the price was driven by the sheer scarcity of the asset and the desperation of the bidder to deploy capital in the AI era.
Strategic Rationale vs. Day-to-Day Reality
Strategically, the logic is seductive, and one can argue that this is the only logical move for Alphabet. Google Cloud Platform (GCP) has long trailed AWS and Azure in security perception. While Google owns Mandiant (world-class incident response), it lacked a dominant prevention engine. Wiz's "Agentless Scanning" technology allows it to instantly map a customer's entire cloud estate-including AWS and Azure workloads-without installing friction-heavy software.
With Wiz's best-in-class products, Google instantly buys credibility and fills a critical void in their portfolio. This move enables Google to pivot to become the dashboard for every enterprise's multi-cloud and AI security strategy, a stack that Thomas Kurian, Google Cloud's CEO, desperately needs to close the gap. Google is also acquiring a team of elite Israeli cybersecurity architects who operate with a speed Google's own bureaucracy has long lost, according to contacts in the industry.
However, we can also point to the graveyard of similar deals. Wiz's commercial strength has been its vendor neutrality. It evaporates the moment it becomes a Google subsidiary. Will AWS and Azure customers continue to trust a security layer owned by their fiercest competitor? This Switzerland Paradox is a critical risk. If customers view Wiz as a Trojan Horse for Google Cloud, the revenue stream is in danger.
Furthermore, there is the question of "Organizational Rejection." Can a flat, hyper-agile startup survive inside the layered hierarchy of Mountain View? The comparison to Mandiant (acquired by Google for $5.4 billion in 2022) is haunting; despite initial retention incentives, the slow erosion of talent and speed became inevitable once the lock-up periods expired and the mission was subsumed by the machine. CEO Sundar Pichai's explicit promise to maintain Wiz's independence suggests Google has learned from the past, aiming to preserve the agility that made Wiz valuable.
The Danger of the High Multiple
While the market debates strategy, we believe the real danger lies in the structure of the transaction itself.
Wiz was acquired on a 40-50x forward revenue multiple. When a buyer pays such an extreme multiple, they remove their own margin for error. To justify a $32 billion price tag to shareholders, Alphabet cannot simply let Wiz "be," despite promises and legal agreements. The financial gravity of the deal will inevitably force them to seek massive, immediate synergies.
The standard M&A Playbook led investment bankers to organise a bidding war that inflated the price. Now, to justify that price, Google will be pressured to integrate Wiz aggressively-cross-selling to Google customers, merging back-ends, and rationalizing costs. This is where the "M&A Paradox" strikes. Cross-selling to Google customers and merging back-ends will be the easy part. The real challenge is preserving Wiz's flat, rapid-iteration culture inside Alphabet's hierarchy. The auction's victory could become a slow erosion of the very capabilities that justified the premium. Google won the dream company, but the integration will likely be a nightmare, for all parties.
Reflections for Business Leaders
This deal underscores live tensions in 2025-2026 M&A: High multiples reward optimism but amplify integration challenges, especially cultural.
Independence promises and retention incentives show awareness of the issue, but disagreements on neutrality and scale highlight potential oversights in standard processes. The 50x multiple, for instance, is so irrational that it signals a process overly focused on price rather than fit.
For buyers, winning the auction is not winning the game. If your M&A process does not measure the "Muscle" (culture) as accurately as the "Fat" (costs), you will inevitably cut the wrong things.
For sellers, an irrational valuation is often a "Poisoned Check." It looks like victory, but it frequently leads to the dismantling of your legacy as the buyer scrambles to recoup their overpayment. Prioritize bidders who demonstrate cultural understanding, as Google attempted with independence pledges. But even here, awareness is not enough. A record multiple like this is totally irrational if the process ignores intangibles.
For all business leaders watching this unfold: The lesson is not about cloud security, but about Stewardship.
The Wiz deal is a reminder that the highest bidder is not always the best steward. A process designed solely to maximize the exit price maximizes the risk of post-closing destruction. True responsible M&A requires resisting the tunnel vision of the auction. It demands a process that values the intangibles of the company as highly as its revenue stream. Because in the end, if you buy the asset but kill the organisation, you have bought, or sold, nothing of value.
Time will tell if Alphabet can defy the odds, but the structural forces of the standard M&A playbook are already working against them.
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Amine Laouedj Managing Director, Glenshore
I advise responsible business leaders who wish to ensure their company ends up in the right hands and continues to flourish after their exit. If these perspectives resonate with your thoughts, I welcome a conversation. Please connect or message me on LinkedIn.
Glenshore is a boutique investment bank with the Succession M&A Playbook, a disciplined approach to align financial outcomes with long-term mission and legacy preservation. Learn more at glenshore.com.