Wiz has turned down a significant acquisition offer from Google, which could have major consequences for the technology sector, particularly for Microsoft.
The search giant aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion. However, Wiz’s CEO Assaf Rappaport announced on Tuesday that the company would not proceed with the offer, opting instead to focus on its goal of generating $1 billion in annual revenue and pursuing an initial public offering (IPO).
This decision comes at a time when Google’s cybersecurity initiatives are under scrutiny, especially following a recent major outage linked to cybersecurity firm CrowdStrike. Analyst Dan Ives from Wedbush noted that concerns from investors and ongoing antitrust issues contributed to the collapse of the deal. Google has faced increased antitrust scrutiny in recent years and recently concluded a trial in one of two significant cases brought forth by the Department of Justice.
In an email to investors, Ives highlighted the potential ripple effects across the tech sector from the failed acquisition, predicting that Google would likely intensify efforts to enhance its cybersecurity capabilities. He also indicated that Microsoft may take this opportunity to strengthen its own cybersecurity platform over the next year and a half.
Microsoft has been under pressure due to a widespread IT outage caused by a flawed update in CrowdStrike’s cybersecurity software, which affects Microsoft Windows systems. This incident has resulted in major disruptions worldwide, impacting businesses, travel, and government operations. Although Ives still regards CrowdStrike as a leading player in cybersecurity, the recent outage suggests that Microsoft should consider expanding its own cybersecurity solutions, particularly in light of Google’s abandoned acquisition.