Wiz’s decision to reject a $23 billion acquisition offer from Google could have significant repercussions for the tech sector, particularly for Microsoft.
Wiz, an Israeli cybersecurity startup, turned down Google’s bid, as CEO Assaf Rappaport emphasized the importance of pursuing their goal of reaching $1 billion in annual revenue and preparing for an initial public offering (IPO). The rejected acquisition would have strengthened Google’s cybersecurity efforts, especially following a significant outage involving major player CrowdStrike, which recently disrupted services across various industries.
Wedbush analyst Dan Ives indicated that investor apprehensions and ongoing antitrust challenges were likely contributors to the cancellation of the deal. Google has faced heightened scrutiny from regulators over antitrust issues and recently concluded a trial related to one of two significant cases led by the Department of Justice.
Ives noted that the failure of this acquisition could create ripple effects throughout the technology sector. Despite the setback, he expects Google to persist in expanding its cybersecurity capabilities. He also suggests that Microsoft might seek to enhance its own cybersecurity portfolio over the next year to 18 months.
This comes in the wake of a global IT outage linked to a defective update from CrowdStrike, which affected Microsoft’s systems, leading to widespread disruptions for users. While Ives maintains that CrowdStrike remains a leader in cybersecurity, this incident highlights the necessity for Microsoft to strengthen its cybersecurity offerings, with the collapse of the Wiz deal potentially providing an opportunity to do so.