Wiz’s decision to decline Google’s acquisition offer could significantly impact the tech sector, particularly Microsoft.
Google had aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion; however, Wiz’s CEO, Assaf Rappaport, announced on Tuesday that the company turned down the offer. Rappaport indicated that the choice was challenging but necessary for Wiz to focus on achieving $1 billion in annual revenue and preparing for an initial public offering (IPO).
This acquisition would have enhanced Google’s cybersecurity capabilities, especially following a recent major service disruption attributed to CrowdStrike, a leading cybersecurity firm. Analyst Dan Ives from Wedbush noted in a report that concerns regarding investor confidence and antitrust issues contributed to the collapse of the deal. Google has faced significant antitrust examination in recent years and recently concluded a trial related to one of its major cases with the Department of Justice.
Ives suggested that the failure of the Wiz acquisition could have broader implications for the tech industry. He anticipates that Google will persist in expanding its cybersecurity presence despite the setback, and he predicts that Microsoft may pursue similar avenues for growth in this sector over the next 12 to 18 months.
Microsoft recently found itself under scrutiny due to a global IT outage linked to a faulty update from CrowdStrike, which led to widespread disruptions across various sectors. Although Ives maintains that CrowdStrike remains a leading name in cybersecurity, the outage serves as a reminder of the need for Microsoft to enhance its own cybersecurity solutions, creating further opportunities following the loss of the Wiz opportunity.