Wiz’s decision to decline Google’s acquisition offer could significantly impact Microsoft and the tech sector as a whole.
Google had aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but on Tuesday, the startup’s CEO, Assaf Rappaport, announced that they would not proceed with the deal. Rappaport described the decision as “tough,” emphasizing the company’s ambition to grow toward an annual revenue of $1 billion and pursue an initial public offering.
The acquisition would have enhanced Google’s cybersecurity division, especially following a recent major outage linked to CrowdStrike, a notable player in the industry. Dan Ives, an analyst from Wedbush, noted in a research note that concerns from investors and antitrust considerations played significant roles in the deal’s collapse. Google has faced extensive antitrust scrutiny and recently concluded a major trial instigated by the Department of Justice.
Ives indicated that the failure of the deal might create ripple effects across the technology sector. He expects Google to continue to invest in expanding its cybersecurity initiatives, and he anticipates that Microsoft will similarly seek to strengthen its cybersecurity offerings in the next 12 to 18 months.
Microsoft recently faced challenges when a global IT outage resulted from a faulty update to cybersecurity software provided by CrowdStrike. This incident, which affected many users and operations worldwide, highlighted the need for Microsoft to enhance its cybersecurity measures. While Ives reaffirmed CrowdStrike’s status as a leading cybersecurity provider, he suggests that the failure of Google’s acquisition could drive Microsoft to further bolster its cybersecurity capabilities.