Wiz has turned down Google’s proposal for what would have become the tech giant’s largest acquisition. This decision is expected to significantly affect the technology sector, particularly Microsoft.
The Israeli cybersecurity startup was offered $23 billion by Google, but Wiz’s CEO, Assaf Rappaport, stated that the choice to reject the offer was a tough one. He emphasized his commitment to growing Wiz towards achieving $1 billion in annual revenue and eventually pursuing an initial public offering (IPO).
The potential acquisition was seen as a strategic move for Google to enhance its cybersecurity services, especially in light of a major outage caused by industry leader CrowdStrike last week. Following the news that the deal had collapsed, Wedbush analyst Dan Ives expressed that investor trepidations and ongoing antitrust scrutiny led to the failure of the acquisition. Google has faced significant antitrust challenges recently and has recently concluded a trial related to one of two major cases brought against it by the Department of Justice.
Ives noted that the lack of this acquisition would likely have widespread implications throughout the sector. He anticipates that Google will continue to focus on expanding its cybersecurity capabilities despite the setback with Wiz, a strategy that Microsoft may also pursue.
He stated, “We believe consolidation is overdue in the cybersecurity sector, and we expect Microsoft to explore strengthening its cybersecurity offerings in the next 12 to 18 months.”
This situation comes after Microsoft found itself in a challenging position due to a global IT outage linked to a faulty update from CrowdStrike. This incident resulted in widespread disruptions, affecting businesses, flights, and government functions. While Ives regards CrowdStrike as a top-tier cybersecurity provider, the recent outage underscores the need for Microsoft to enhance its own cybersecurity measures, a need that may intensify following the failed Wiz acquisition.