Wiz’s decision to reject Google’s $23 billion acquisition offer could have significant ramifications for the technology sector, particularly for Microsoft. The Israeli cybersecurity startup had been in talks with Google in what would have been the company’s largest acquisition to date. However, Wiz’s CEO Assaf Rappaport announced that the company would not proceed with the deal as he aimed to focus on building Wiz towards generating $1 billion in annual revenue and eventually pursuing an IPO.
This development comes shortly after a major cybersecurity incident caused by CrowdStrike, which impacted the industry and highlighted the importance of robust cybersecurity measures. According to Wedbush analyst Dan Ives, the failure of the acquisition stems from investor concerns and ongoing antitrust issues surrounding Google. The tech giant has faced intense scrutiny and recently concluded a trial related to antitrust matters from the Department of Justice.
Ives noted that the collapse of the deal will likely create ripple effects throughout the sector. He suggested that Google will remain committed to expanding its cybersecurity capabilities despite losing the Wiz opportunity, a path Microsoft is expected to follow as well. He indicated that consolidation within the cybersecurity sector is overdue and anticipates that Microsoft will seek to enhance its cybersecurity platform in the next 12 to 18 months.
Microsoft recently faced criticism after a global IT outage linked to an update from CrowdStrike, which manages security for its Windows operating systems. This incident disrupted numerous businesses and government operations, further underscoring the need for improved cybersecurity measures. While Ives maintained that CrowdStrike remains a leading entity in cybersecurity, the outage may prompt Microsoft to enhance its cybersecurity offerings, opening new possibilities in the wake of Google’s failed acquisition.