Wiz’s decision to decline Google’s $23 billion acquisition offer could have significant consequences for the technology sector, especially for Microsoft.
Google had aimed to acquire the Israeli cybersecurity startup Wiz to enhance its cybersecurity capabilities, particularly following a recent major outage caused by CrowdStrike that impacted the industry. However, Wiz CEO Assaf Rappaport announced the difficult choice to turn down the offer in favor of pursuing the company’s goal of reaching $1 billion in annual revenue and preparing for an initial public offering.
Dan Ives, an analyst at Wedbush, indicated in a research note that concerns from investors and ongoing antitrust challenges contributed to the collapse of the deal. Google has faced rigorous antitrust scrutiny recently, with its trial in one of two significant cases by the Department of Justice concluding just days ago.
Ives predicted that the fallout from this deal’s failure would reverberate throughout the industry. Despite this setback, he believes Google will likely increase its efforts to expand its cybersecurity operations, as will Microsoft, its main competitor.
Ives remarked that consolidation in the cybersecurity sector is overdue, and he expects Microsoft to take steps to enhance its cybersecurity offerings over the next year or so. Recently, Microsoft faced backlash due to a global IT outage linked to a problematic update from CrowdStrike, which is used in its Windows operating systems to thwart hacking attempts. This disruption, reported by users worldwide, calls into question the robustness of Microsoft’s cybersecurity measures and emphasizes the need for improvements, especially in light of the failed Wiz acquisition that could have presented new opportunities for growth.