Wiz’s decision to decline Google’s acquisition offer has significant consequences for the technology sector, particularly for Microsoft.
Google aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company would not proceed with the deal. Rappaport described this as a difficult choice, emphasizing Wiz’s goal of reaching $1 billion in annual revenue and pursuing an initial public offering.
This potential acquisition would have enhanced Google’s cybersecurity capabilities, especially in light of a recent major outage involving industry player CrowdStrike. According to Wedbush analyst Dan Ives, investor fears and ongoing antitrust issues contributed to the failure of the deal. Google has been under intense scrutiny regarding antitrust regulations and recently concluded a trial involving a key case from the Department of Justice.
Ives indicated that the fallout from this failed acquisition would be felt throughout the sector. He believes Google will continue to focus on expanding its cybersecurity initiatives, a path also expected from Microsoft.
Ives highlighted that consolidation in the cybersecurity field is overdue and anticipates that Microsoft may seek to strengthen its cybersecurity solutions in the next 12 to 18 months. The need for this was underscored by last week’s widespread IT outage, which resulted from a malfunction in a cybersecurity update provided by CrowdStrike. This incident, which led to significant disruption for Microsoft users globally, suggested to Ives that Microsoft could benefit from bolstering its cybersecurity efforts, and the collapse of the Google-Wiz deal could facilitate that progress.