Wiz’s decision to walk away from Google’s proposed $23 billion acquisition could have significant repercussions for the technology sector, notably for Microsoft. The Israeli cybersecurity startup, led by CEO Assaf Rappaport, chose to decline Google’s offer to focus on achieving $1 billion in annual revenue and pursuing an initial public offering (IPO).
This deal would have strengthened Google’s cybersecurity capabilities following a major disruption caused by CrowdStrike that affected the industry last week. Analyst Dan Ives from Wedbush expressed in a research note that the collapse of negotiations stemmed from investor anxiety and antitrust challenges. Google is currently under scrutiny regarding antitrust issues, having just concluded a trial related to one of two high-profile cases filed by the Department of Justice.
Ives mentioned that the failure of this acquisition will likely have widespread effects in the sector. He anticipates that Google will continue to aggressively pursue expansion in its cybersecurity services, a path that Microsoft is also expected to explore.
There has been a growing belief that consolidation in the cybersecurity field is necessary, and Ives suggested that Microsoft may seek to enhance its own cybersecurity platform in the coming year or year and a half. Microsoft found itself in the news recently due to the widespread IT outage caused by a problematic update from CrowdStrike. Although CrowdStrike is considered a leader in cybersecurity, the incident highlighted the urgent need for Microsoft to strengthen its cybersecurity measures, particularly with Google’s acquisition attempt falling through.