Wiz’s decision to reject Google’s acquisition offer could significantly impact the tech landscape, particularly for Microsoft.
Google was poised to acquire Israeli cybersecurity firm Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that they chose not to proceed with the deal. Rappaport cited a desire to focus on achieving $1 billion in annual revenue and pursuing an initial public offering (IPO) as reasons for the decision.
This acquisition would have enhanced Google’s cybersecurity portfolio, especially following a recent major disruption in the industry caused by an outage at CrowdStrike. In a research note, Wedbush analyst Dan Ives highlighted that investor apprehensions and ongoing antitrust challenges contributed to the deal’s collapse. Google has faced considerable scrutiny over antitrust issues and recently concluded one of two significant trials initiated by the Department of Justice.
Ives indicated that the failure of the Wiz acquisition could create ripple effects across the entire sector. He predicted that Google would likely persist in expanding its cybersecurity initiatives, a trend that Microsoft may also follow.
Ives suggested there is a pressing need for consolidation within the cybersecurity sector, indicating that Microsoft might look to enhance its own cybersecurity tools in the next year or so. Microsoft faced criticism recently after a major global IT outage linked to a faulty update in CrowdStrike’s cybersecurity software affected numerous users worldwide. This incident pointed to vulnerabilities that Microsoft may need to address, especially with the increased focus on strengthening its cybersecurity offerings following the unsuccessful Google-Wiz deal.