Wiz’s decision to withdraw from a significant acquisition deal with Google could have significant implications for Microsoft and the broader tech sector. The Israeli cybersecurity startup had been in discussions with Google regarding a $23 billion purchase, but CEO Assaf Rappaport announced on Tuesday that the company would not proceed with the offer. Rappaport described the choice as “tough,” emphasizing that Wiz aims to continue its growth toward achieving $1 billion in annual revenue and eventually going public.
The potential acquisition was expected to strengthen Google’s cybersecurity division, especially following a recent major outage linked to CrowdStrike, a prominent player in the industry. Analyst Dan Ives from Wedbush noted that concerns about investors and antitrust issues were likely factors that led to the collapse of the deal. Google has faced significant antitrust scrutiny in recent years, having recently concluded one of two critical trials initiated by the Department of Justice.
Ives suggested that the failure of the Wiz acquisition would create ripples across the tech industry. He anticipated that Google would still focus on enhancing its cybersecurity capabilities despite the setback, a trend that may also encourage Microsoft to pursue expansions in this area.
Ives commented that the cybersecurity sector is ripe for consolidation, and he expects Microsoft to seek opportunities to strengthen its own cybersecurity platform in the next year to 18 months. Microsoft has recently come under scrutiny due to a widespread IT outage linked to an update from CrowdStrike, which affected many users globally and disrupted multiple sectors, including businesses and government operations.
While Ives continues to regard CrowdStrike as the leading standard in cybersecurity, this outage indicates that Microsoft might benefit from intensifying its cybersecurity efforts, particularly in light of Google’s failed attempt to acquire Wiz.