Wiz’s decision to decline Google’s acquisition offer could significantly affect Microsoft and the broader tech industry. Google had aimed to purchase the Israeli cybersecurity startup Wiz for $23 billion; however, Wiz CEO Assaf Rappaport announced on Tuesday that the company would not proceed with the deal. Rappaport indicated that the decision was made to focus on growing Wiz towards an annual revenue goal of $1 billion and planning for an initial public offering (IPO).
The acquisition would have enhanced Google’s cybersecurity segment, especially following a recent major outage by CrowdStrike, which highlighted vulnerabilities in the industry. Wedbush analyst Dan Ives noted that worries from investors and ongoing antitrust issues have led to the collapse of the deal. Google has faced intense scrutiny from regulators, recently concluding a trial related to two significant antitrust cases initiated by the Department of Justice.
Ives commented that the failure of this acquisition will likely create “ripple impacts” across the cybersecurity sector. He expects Google to intensify efforts to expand its cybersecurity solutions, a route also anticipated for Microsoft. Ives stated that there is a pressing need for consolidation within the cybersecurity market, foreseeing Microsoft potentially seeking to enhance its cybersecurity offerings in the next 12 to 18 months.
Microsoft has faced criticism after a significant global IT outage triggered by an issue with CrowdStrike’s software. Users reported encountering severe disruptions, including the notorious “blue screens of death,” affecting various sectors, including businesses and government operations. Although Ives still regards CrowdStrike as a leader in cybersecurity, the recent incident indicates a need for Microsoft to strengthen its cybersecurity capabilities, a possibility that the halted Google-Wiz deal now creates.