Some thoughts on the $GOOGL Wiz deal:

1. The acquisition makes sense for GCP's portfolio.

GCP’s security portfolio is strong across analytics & managed services (Mandiant), SecOps/SIEM (Google Chronicle), and monitoring/governance (Cloud Monitoring, Dataplex).

Wiz is the top cloud security company and fills a lagging area in GCP’s roadmap.

2. Wiz significantly improves GCP's security competitive positioning with $Microsoft (MSFT.US)$ .

Microsoft has the largest security practice in the world. They have a strong product roadmap and distribution. However, they continue to have security lapses meaning the door’s open for competition to take share.

Pairing Wiz + GCP’s distribution network would be a serious competitor to Microsoft (both Wiz and GCP are already serious competitors on their own).

3. Synergies?

One of the most common sources of acquisition value creation is the ability to sell products through the acquirers' network. GCP ($36B run rate) has one of the largest distribution networks in enterprise software.

With that being said, the deal is only rumored and will face hurdles in antitrust as well - no guarantee the deal gets done. It also would leave AWS in an interesting position without a clear security strategy.

Cybersecurity value chain here from the newsletter here: