Wiz has opted out of a potential acquisition by Google, a decision that may have significant consequences for the tech sector, particularly for Microsoft.
Google had aimed to acquire the Israeli cybersecurity company Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company would not accept the offer. Rappaport cited the need to focus on growing Wiz towards achieving $1 billion in annual revenue and preparing for an initial public offering (IPO) as reasons for the decision.
The potential acquisition would have strengthened Google’s position in cybersecurity at a time when the industry faced turmoil due to a major outage linked to CrowdStrike last week. Wedbush analyst Dan Ives noted that investor apprehensions and antitrust challenges contributed to the collapse of the deal. Google has faced rigorous antitrust investigations in recent years and has recently concluded one trial related to a significant case from the Department of Justice.
Ives stated in a communication to investors that the failure of the acquisition is likely to create ripple effects throughout the industry. He anticipates that Google will continue to invest in expanding its cybersecurity capabilities despite the setback with Wiz, a sentiment echoed for Microsoft as well.
Ives believes that there is a pressing need for consolidation within the cybersecurity arena and expects Microsoft to possibly pursue similar strategies to enhance its cybersecurity offerings over the next 12 to 18 months. The company faced scrutiny when its cybersecurity software, which depends on CrowdStrike for protection against cyber threats, was associated with a major global IT outage occurring last Friday. Users reported critical disruptions, including the infamous “blue screens of death,” impacting businesses, flights, and government functions worldwide.
While Ives still regards CrowdStrike as the leading name in cybersecurity, the recent outage indicates that Microsoft may benefit from strengthening its cybersecurity division, especially in light of the failed Google-Wiz deal.