Wiz’s decision to reject Google’s acquisition offer could have significant consequences for Microsoft and the broader tech industry. Google aimed to acquire the Israeli cybersecurity company for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company would not move forward with the deal. Rappaport described the choice as “tough,” emphasizing Wiz’s commitment to reaching $1 billion in annual revenue and pursuing an initial public offering.
This acquisition would have strengthened Google’s cybersecurity capabilities, especially following a major outage last week involving CrowdStrike, a prominent player in the industry. Wedbush analyst Dan Ives noted that concerns among investors and ongoing antitrust investigations contributed to the collapse of the deal. Google has faced intense scrutiny from regulators, recently concluding a trial regarding one of two significant antitrust cases brought against it by the Department of Justice.
Ives stated in a note to investors that the failed acquisition will likely have ripple effects throughout the tech sector. He anticipates that Google will continue to enhance its cybersecurity strategy, with Microsoft also expected to follow suit. Ives believes that consolidation is overdue in the cybersecurity market, suggesting that Microsoft may seek to expand its security platform over the next year to 18 months.
Microsoft recently faced criticism due to a global IT outage linked to a problematic update from CrowdStrike, which may underscore the need for the company to strengthen its cybersecurity offerings. While Ives maintains that CrowdStrike remains a leading standard in the field, the recent disruptions highlight an opportunity for Microsoft to further develop its cybersecurity capabilities, especially in light of Google’s failed attempts to bolster its own security division through acquisition.