Wiz’s decision to walk away from a major acquisition by Google could significantly impact the technology sector, particularly Microsoft.
The search engine giant aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion. However, Wiz’s CEO Assaf Rappaport announced on Tuesday that they have declined the offer. Rappaport described the choice as “tough,” stating that turning down the substantial sum was necessary to continue pursuing the company’s goal of reaching $1 billion in annual revenue and preparing for an IPO.
This acquisition would have strengthened Google’s cybersecurity capabilities, especially following a recent major outage caused by CrowdStrike, a prominent player in the industry. Analyst Dan Ives from Wedbush noted that concerns from investors and antitrust issues contributed to the downfall of the deal. Google has faced heightened antitrust scrutiny in recent years and recently concluded one of two significant trials initiated by the Department of Justice.
Ives indicated that the collapse of this deal will likely have widespread effects across the tech sector. He mentioned that Google will probably continue to focus on expanding its cybersecurity offerings despite the setback. Microsoft is also expected to take similar steps.
Ives suggested that the cybersecurity sector is ripe for consolidation and anticipates that Microsoft may seek to enhance its own cybersecurity platform over the next 12 to 18 months. The company recently faced scrutiny after a global IT outage linked to a faulty update to CrowdStrike’s cybersecurity software, which affected various operations worldwide. While Ives maintains that CrowdStrike remains the leader in cybersecurity, this incident may prompt Microsoft to further strengthen its cybersecurity services, especially in light of Google’s failed acquisition.