Wiz’s decision to reject Google’s acquisition offer could significantly affect Microsoft and the broader tech landscape. The Israeli cybersecurity startup had been in talks with Google for a potential $23 billion deal, but Wiz CEO Assaf Rappaport stated that the company opted out to focus on reaching an annual revenue target of $1 billion and plans for an IPO.
The unsuccessful acquisition would have strengthened Google’s position in the cybersecurity sector, especially following a large-scale outage caused by CrowdStrike, a major player in the industry. Wedbush analyst Dan Ives noted that the deal’s collapse stemmed from investor apprehensions and ongoing antitrust scrutiny of Google, which has faced intense legal challenges, including a recent trial related to antitrust issues initiated by the Department of Justice.
Ives predicted that the failure of the acquisition would have ripple effects throughout the tech sector. He believes that despite the setback, Google will continue to invest heavily in expanding its cybersecurity capabilities, and Microsoft is expected to follow suit. Ives suggested that the cybersecurity sector is ripe for consolidation and that Microsoft may look to enhance its own cybersecurity offerings in the next 12 to 18 months.
Microsoft recently encountered scrutiny due to a widespread IT outage linked to an update from CrowdStrike, which manages cybersecurity for its Windows operating system. The incident raised concerns among Microsoft users worldwide, highlighting the need for the company to strengthen its cybersecurity strategy, especially with the potential opening created by Google’s failed acquisition of Wiz.