Wiz’s decision to walk away from a significant acquisition deal with Google is poised to have substantial repercussions in the tech industry, particularly for Microsoft.
Google was in discussions to acquire the Israeli cybersecurity startup Wiz for $23 billion, but Wiz’s CEO, Assaf Rappaport, announced on Tuesday that the offer was declined. Rappaport explained that the choice was challenging, but crucial for Wiz’s ambition to reach $1 billion in annual revenue and pursue an initial public offering (IPO).
This acquisition was expected to enhance Google’s cybersecurity capabilities, especially in the wake of a major incident that recently impacted the sector, which was linked to industry player CrowdStrike. Analyst Dan Ives from Wedbush indicated in a research note that the deal fell through primarily due to investor concerns and ongoing antitrust issues facing Google, which has been under significant scrutiny and recently concluded a trial related to a major antitrust case led by the Department of Justice.
Ives noted that the failed acquisition would likely create “ripple impacts across the sector.” Despite the setback, he predicted that Google would continue to intensify its efforts to expand its cybersecurity presence, a trend likely mirrored by Microsoft as well.
Ives added that the cybersecurity landscape is ripe for consolidation, suggesting that Microsoft may look to enhance its own cybersecurity platform in the next 12 to 18 months. The recent global IT outage caused by CrowdStrike’s flawed update highlighted vulnerabilities, bringing Microsoft under scrutiny as users experienced widespread service disruptions. Although Ives maintains that CrowdStrike remains the leading standard in cybersecurity, the recent incident underscores the need for Microsoft to strengthen its cybersecurity offerings, a gap that the collapse of the Google-Wiz deal may further highlight.