Wiz’s decision to reject Google’s acquisition offer could have significant consequences for the tech industry, particularly for Microsoft. Google had aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company would not proceed with the deal. Rappaport described the choice as a “tough” one, made in favor of focusing on growing Wiz towards achieving $1 billion in annual revenue and preparing for an initial public offering (IPO).
The acquisition would have strengthened Google’s cybersecurity segment at a time when the industry was recovering from a major outage caused by CrowdStrike, a prominent player in the field. Following the announcement, Wedbush analyst Dan Ives noted that concerns from investors and ongoing antitrust issues led to the breakdown of the deal. Google has faced heightened scrutiny regarding antitrust matters and recently concluded a trial linked to a significant Department of Justice case.
Ives indicated that the fallout from this deal’s failure would have widespread effects across the tech sector. He predicted that Google would not back down from its efforts to expand its cybersecurity presence, a trend that will also be mirrored by Microsoft.
Ives emphasized the need for consolidation within the cybersecurity industry and suggested that Microsoft might pursue actions to strengthen its own cybersecurity capabilities over the next 12 to 18 months. Recently, Microsoft faced scrutiny following a global IT outage related to CrowdStrike’s software, which impacted numerous users and led to substantial disruptions across various sectors. While CrowdStrike continues to be considered a leader in cybersecurity, the incident indicates that Microsoft may need to enhance its security offerings, making the failure of the Google-Wiz deal an additional opportunity for growth.