Build vs Buy: Why Cybersecurity Companies Prefer Acquisitions

The CODEW | Build vs Buy Series, Part 4

Cybersecurity M&A hit $96 billion across roughly 400 disclosed deals in 2025, a 270% jump in deal value over 2024, and the pace has not slowed in 2026. Google closed its $32 billion purchase of cloud security company Wiz in March — the largest pure-play cybersecurity acquisition on record.

Palo Alto Networks completed its roughly $25 billion acquisition of identity-security leader CyberArk in February. CrowdStrike bought identity startup SGNL for $740 million in January. Cisco closed its purchase of Astrix Security for about $400 million in May. This isn't a handful of companies going shopping. It's the entire cybersecurity industry converging on the same conclusion: buy the point solution, don't build it.

Photo by Markus Winkler/Pexels    Wooden tiles spell 'CYBERSEC' against a soft-focused green background

The Platformization Playbook

Palo Alto Networks is the clearest example of a deliberate strategy here. Under CEO Nikesh Arora, the company has spent the past two years assembling what it calls a "platformization" strategy — CyberArk for identity, Chronosphere for observability ($3.35 billion), Protect AI for AI-model security (~$700 million), Talon for browser security ($625 million), and Koi for agentic-AI endpoint risk (~$400 million), all folded into one security platform rather than left as separate products a customer has to stitch together themselves.

Each of those categories — identity, observability, AI security, browser security — represents years of specialized engineering and a head start on real-world threat data that a general-purpose security vendor cannot replicate quickly by building internally. Buying the category leader is often the only way to get genuine best-of-breed technology inside a platform on a competitive timeline.

The New Category Nobody Had Built For

What's accelerating the 2026 wave specifically is agentic AI. As organizations roll out AI agents that can act autonomously across systems, only about 24% of organizations can currently implement effective guardrails and real-time monitoring of what those agents are doing, according to Cisco. That's a security gap that essentially didn't exist three years ago — there is no legacy internal team with a decade of institutional knowledge in "securing AI agents," because the problem itself is new.

That's precisely why acquisition beats internal build in this specific moment: nobody has the in-house expertise yet, so the fastest way to acquire it is to buy one of the handful of startups that have spent the last year or two building nothing else. Cisco's purchase of Astrix (non-human identity security for AI agents), OpenAI's purchase of Promptfoo (AI agent red teaming, already used by roughly a quarter of the Fortune 500), and Palo Alto's purchase of Koi (agentic endpoint risk) all follow this exact logic.

Buying Before a Rival Does

There's also a denial dynamic at work, sharper here than almost anywhere else in tech. Cybersecurity is a market where whoever owns the best-in-class point solution first can lock competitors out of licensing it. ServiceNow's $7.75 billion purchase of Armis and Google's Wiz acquisition are both, in part, bets that owning category-defining security technology outright is worth a premium price precisely because it keeps that technology out of a rival platform's hands.

The Trade-Off: Consolidation vs. Innovation

The obvious risk is that a market moving this fast toward consolidation could slow the pace of innovation that made these acquired startups valuable in the first place. Historical precedent in tech M&A suggests exactly that tension: once a market concentrates around a few platform vendors, competitive pressure to keep innovating can ease off. Cybersecurity may be an exception, since the threat landscape itself — especially AI-driven attacks — keeps evolving regardless of vendor consolidation, but it's a real question for anyone tracking whether platformization delivers better security outcomes or just fewer, pricier vendors.

The Takeaway

Cybersecurity may be the single clearest build-vs-buy case in tech right now: threats evolve faster than any internal R&D roadmap can keep pace with specialized point-solution startups already have the relevant expertise and real-world data, and owning a category leader denies it to competitors in the same motion. With global cybersecurity spending projected to exceed $520 billion in 2026, the acquirers aren't slowing down — they're racing to platformize before someone else locks up the pieces first.

Previously in the series: OpenAI's Path to Enterprise Growth. Next: NVIDIA and the Race for AI Infrastructure.

Erwin Castro

Founder & Editor • The CODEW

Erwin Castro is the founder and editor of The CODEW, covering technology mergers and acquisitions, startup exits, artificial intelligence, enterprise software, and Build vs Buy strategy. With more than a decade of journalism experience, he has contributed to Sportskeeda, IBTimes, University Herald, US Blasting News, and Seeking Alpha. His work focuses on explaining the business strategy behind technology deals and their impact on the global technology industry.

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