Wiz’s decision to reject Google’s acquisition offer could significantly impact Microsoft and the broader tech industry. Google was attempting to acquire the Israeli cybersecurity firm Wiz for $23 billion, but Wiz’s CEO Assaf Rappaport announced on Tuesday that they had opted to forgo the offer in pursuit of achieving $1 billion in annual revenue and preparing for an initial public offering.
This acquisition would have enhanced Google’s cybersecurity services, especially following a major outage linked to CrowdStrike, a significant player in the industry, which had occurred just days earlier. Dan Ives, an analyst at Wedbush, indicated in a research note that concerns regarding investor sentiment and antitrust issues contributed to the breakdown of the deal. Google has faced intense scrutiny over antitrust matters and recently concluded a major trial related to it.
Ives noted that the collapse of this acquisition would have wider implications across the cybersecurity sector. He expects Google to persist in expanding its cybersecurity initiatives, while Microsoft may also seek to enhance its cybersecurity offerings in the next 12 to 18 months.
Microsoft recently faced criticism due to a global IT outage caused by a problematic update to CrowdStrike’s software, which affected its Windows operating system. This incident highlighted vulnerabilities in Microsoft’s cybersecurity infrastructure, reinforcing the notion that the company may need to strengthen its cybersecurity segment, especially in light of Google’s failed acquisition of Wiz.