Wiz has decided not to proceed with what would have been Google’s largest acquisition, a move that could have significant ramifications for the technology sector, particularly for Microsoft. The Israeli cybersecurity firm rejected Google’s $23 billion offer, with Wiz CEO Assaf Rappaport stating that the choice was challenging but necessary for the company to pursue its goal of reaching $1 billion in annual revenue and preparing for an initial public offering.
The acquisition was expected to strengthen Google’s cybersecurity division, especially following a recent major outage associated with industry leader CrowdStrike. Wedbush analyst Dan Ives highlighted in a research note that concerns from investors and ongoing antitrust issues contributed to the deal’s collapse. Google has faced increasing scrutiny from regulators and recently concluded a trial related to a major antitrust case initiated by the Department of Justice.
Ives noted that the failed acquisition would likely have ripple effects throughout the tech sector. Despite the setback with Wiz, he anticipated that Google would continue to enhance its cybersecurity capabilities, a direction that Microsoft is expected to follow as well.
Ives also indicated that the cybersecurity sector is ripe for consolidation, suggesting that Microsoft might seek to strengthen its own cybersecurity operations within the next 12 to 18 months. This comes after Microsoft faced scrutiny due to a global IT outage linked to a problematic update from CrowdStrike, the company it partners with for cybersecurity measures. The disruption affected various industries, including businesses and government operations. While CrowdStrike remains a leading name in the field, the incident suggests a potential need for Microsoft to enhance its cybersecurity services, a necessity that the failed Google-Wiz deal could further highlight.