Wiz’s decision to reject Google’s acquisition offer could have significant effects on Microsoft and the overall tech landscape. Google had intended to acquire the Israeli cybersecurity firm Wiz for $23 billion, but CEO Assaf Rappaport chose to forgo this lucrative deal to focus on achieving $1 billion in annual revenue and preparing for an initial public offering.
This acquisition would have strengthened Google’s cybersecurity division, particularly after a recent major outage involving crowd favorite CrowdStrike, a competitor in the cybersecurity market. Analyst Dan Ives from Wedbush noted that investor apprehensions and ongoing antitrust concerns were key factors leading to the failure of the deal. Google has faced intense scrutiny regarding antitrust issues and has recently concluded a trial associated with these challenges.
Ives indicated that the collapse of the deal could have “ripple effects” throughout the cybersecurity sector. He anticipates that Google will intensify its efforts to enhance its cybersecurity capabilities despite losing out on Wiz. Microsoft, facing its own challenges, including handling a widespread IT outage linked to a faulty update from CrowdStrike, is also expected to pursue expansion in the cybersecurity domain.
Ives emphasized that the cybersecurity industry is ripe for consolidation, suggesting that Microsoft may seek to bolster its security offerings over the next year to 18 months. As the world encountered disruptions linked to the CrowdStrike outage, which affected businesses and government operations, the urgency for improvement in cybersecurity measures has become increasingly evident.