Wiz’s decision to decline a $23 billion acquisition offer from Google has significant implications for the technology industry, particularly for Microsoft. The Israeli cybersecurity startup, led by CEO Assaf Rappaport, chose to reject the deal in favor of focusing on its growth trajectory, aiming for an annual revenue of $1 billion and planning for an initial public offering.
The potential acquisition would have enhanced Google’s cybersecurity portfolio, especially following a recent major outage attributed to CrowdStrike, which raised concerns in the sector. Analyst Dan Ives of Wedbush noted that issues related to investor sentiment and antitrust scrutiny contributed to the breakdown of the deal. Google has been under significant antitrust investigation and recently concluded one of its major trials with the Department of Justice.
In an email to investors, Ives stated that the failure of this deal could lead to broader repercussions in the cybersecurity market. He predicted that Google would continue to pursue expansion in cybersecurity despite the setback with Wiz, a strategy also likely to be adopted by Microsoft.
Ives suggested that consolidation within the cybersecurity industry is overdue and that Microsoft may seek to strengthen its cybersecurity offerings in the next 12 to 18 months. This comes in light of a recent global IT outage caused by a malfunction in CrowdStrike’s software, which affected Microsoft systems. While CrowdStrike is regarded as a leader in the cybersecurity space, the incident highlights the need for Microsoft to bolster its own cybersecurity measures, and the failure of the Google-Wiz acquisition could provide further impetus in this direction.