Wiz’s decision to reject Google’s proposed $23 billion acquisition could have significant repercussions for the tech industry, particularly for Microsoft.
Wiz, an Israeli cybersecurity startup, opted not to proceed with the deal, with CEO Assaf Rappaport stating that the choice was difficult. He emphasized the company’s ambition to build Wiz towards achieving $1 billion in annual revenue and eventually pursuing an IPO.
The acquisition would have enhanced Google’s cybersecurity capabilities at a time when the sector was recently shaken by a major outage involving CrowdStrike. Following the announcement, Wedbush analyst Dan Ives noted that concerns from investors and ongoing antitrust scrutiny contributed to the deal’s collapse. Google has faced significant antitrust challenges in recent years, culminating in a recent trial from the Department of Justice.
Ives pointed out that the failed acquisition would likely create ripple effects across the sector. He suggested that Google would continue to invest in expanding its cybersecurity offerings despite the loss of the Wiz deal. Similarly, Microsoft is expected to seek opportunities to strengthen its own cybersecurity platform in the next 12 to 18 months.
The demand for strengthened cybersecurity measures has been underscored by a recent widespread IT outage caused by a malfunctioning update to CrowdStrike’s software, which disrupted various services on Microsoft’s platforms. Although Ives maintained that CrowdStrike remains a top-tier player in cybersecurity, the incident indicates the need for Microsoft to enhance its cybersecurity infrastructure, with the failed Wiz deal opening additional avenues for growth.