Wiz’s decision to decline a $23 billion acquisition offer from Google could significantly impact the tech sector, particularly Microsoft. The Israeli cybersecurity startup announced its refusal on Tuesday, with CEO Assaf Rappaport stating that the choice, though difficult, was made to focus on achieving $1 billion in annual revenue and pursuing an IPO.
The acquisition would have enhanced Google’s cybersecurity division shortly after a major outage at CrowdStrike, another key player in the industry. Following the news of Wiz’s rejection, Wedbush analyst Dan Ives noted that investor concerns and ongoing antitrust issues contributed to the deal’s collapse. Google has faced increased antitrust scrutiny in recent years and recently concluded a significant trial linked to actions taken by the Department of Justice.
Ives emphasized that the failure of this acquisition could have broader effects throughout the sector. He anticipates that, despite the deal’s cancellation, Google will continue to strengthen its cybersecurity efforts, a path that Microsoft is also likely to follow.
The analyst predicts that Microsoft may seek to enhance its cybersecurity platform in the coming 12 to 18 months, especially after a recent global IT outage caused by a problematic update to CrowdStrike’s software, which disrupted operations for numerous companies, flights, and government services. Although Ives still regards CrowdStrike as a leader in cybersecurity, the incident underscores the necessity for Microsoft to enhance its cybersecurity capabilities, a need that is further emphasized by the collapse of the Wiz deal.