Wiz’s decision to reject Google’s acquisition offer could significantly impact the tech sector, particularly for Microsoft.
Google had aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but the deal fell through on Tuesday. Wiz’s CEO, Assaf Rappaport, stated that he made the challenging choice to decline the offer to focus on growing Wiz toward an annual revenue goal of $1 billion and preparing for an initial public offering.
This acquisition would have enhanced Google’s cybersecurity capabilities amid recent turbulence in the industry, especially following a major outage linked to CrowdStrike. Dan Ives, an analyst at Wedbush, noted investor concerns and antitrust scrutiny as reasons for the deal’s collapse. Google’s legal challenges with the Department of Justice have drawn significant attention in recent years.
Ives remarked that the breakdown of the deal would likely create ripple effects throughout the tech industry. He predicted that Google would persist in expanding its cybersecurity services despite the setback with Wiz, as would its competitor, Microsoft.
Ives suggested that there is a pressing need for consolidation in the cybersecurity sector and speculated that Microsoft may pursue similar initiatives to strengthen its cybersecurity platform in the next 12 to 18 months. Microsoft recently faced negative publicity due to a global IT outage caused by a flaw in CrowdStrike’s cybersecurity software, impacting users worldwide. Although Ives still regards CrowdStrike as a leading name in cybersecurity, this incident underscores the importance for Microsoft to enhance its own cybersecurity offerings, further amplified by Google’s failed acquisition attempt.