Wiz’s decision to reject Google’s acquisition offer could significantly affect the tech industry, particularly Microsoft.
Google was planning to acquire Israeli cybersecurity startup Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company would not proceed with the deal. Rappaport described the choice as “tough” but necessary for Wiz to continue its growth towards achieving $1 billion in annual revenue and preparing for an IPO.
This acquisition would have strengthened Google’s cybersecurity business, especially after a major outage last week caused by CrowdStrike, a prominent player in the industry. Analyst Dan Ives from Wedbush noted that the breakdown of the deal was influenced by investor concerns and ongoing antitrust investigations surrounding Google, which has faced intense scrutiny and recently concluded a significant trial related to antitrust allegations from the Department of Justice.
Ives stated in his analysis that the failure of this deal would likely lead to broader effects across the sector. He expects Google to further pursue growth in its cybersecurity division despite the setback. Similarly, he anticipates that Microsoft will seek ways to enhance its cybersecurity platform in the next 12 to 18 months, recognizing that consolidation in the cybersecurity market is overdue.
Microsoft faced scrutiny recently due to a widespread global IT outage linked to a problematic update in CrowdStrike’s cybersecurity software. This incident disrupted businesses and government operations worldwide, drawing attention to the potential need for Microsoft to strengthen its cybersecurity strategies. While Ives believes CrowdStrike remains a leading force in cybersecurity, the recent outage may prompt Microsoft to take additional steps to bolster its cybersecurity capabilities, particularly now that Google’s acquisition of Wiz has fallen through.