Wiz’s decision to reject Google’s acquisition offer could significantly affect Microsoft and the broader tech industry. Google intended to acquire Israeli cybersecurity startup Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company would not move forward with the deal. Rappaport described this decision as “tough,” emphasizing Wiz’s goal to independently build toward achieving $1 billion in annual revenue and pursuing an initial public offering.
The potential acquisition aimed to strengthen Google’s cybersecurity division at a time when the sector faced scrutiny following a major outage caused by CrowdStrike, a leading cybersecurity firm, last week. Wedbush analyst Dan Ives noted in a recent research note that investor worries and ongoing antitrust challenges contributed to the collapse of the deal. Google has faced increasing antitrust scrutiny and has recently concluded a significant trial initiated by the Department of Justice.
Ives stated that the failure of this deal would likely create ripple effects throughout the tech sector. He suggested that, despite the setback regarding Wiz, Google would probably continue to focus on expanding its cybersecurity capabilities, a move mirrored by its competitor, Microsoft.
Ives highlighted that consolidation within the cybersecurity sector is overdue, anticipating that Microsoft may seek to enhance its own cybersecurity platform in the next 12 to 18 months. The recent global IT outage linked to a faulty CrowdStrike software update has put Microsoft under scrutiny, revealing vulnerabilities that could necessitate strengthening its cybersecurity offerings. Despite Ives labeling CrowdStrike as the industry leader, the incident could push Microsoft to reassess and improve its position in cybersecurity, especially in light of Google’s unsuccessful acquisition attempt.