Wiz’s decision to reject a significant acquisition offer from Google could lead to notable repercussions for the technology sector, particularly impacting Microsoft.
The tech giant had aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion. However, on Tuesday, Wiz’s CEO Assaf Rappaport announced the company would not proceed with the sale. Rappaport described the choice as “tough,” emphasizing that Wiz intends to focus on achieving $1 billion in annual revenue and pursuing an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity capabilities amid heightened concerns following a recent major outage involving CrowdStrike. Following the announcement of the deal’s cancellation, Wedbush analyst Dan Ives noted that investor apprehensions and antitrust issues contributed to the deal’s demise. Google is currently facing significant antitrust scrutiny and has recently completed a trial related to one of two major cases brought by the Department of Justice.
Ives commented that the failure of the acquisition could have “ripple impacts” throughout the technology sector. He suggested that Google will likely continue to enhance its cybersecurity efforts, and Microsoft may follow suit.
According to Ives, there is a pressing need for consolidation within the cybersecurity sector, indicating that Microsoft might take steps to strengthen its own cybersecurity platform over the next year to 18 months. Microsoft was previously in the news due to a widespread IT outage triggered by a faulty update to its cybersecurity software, provided by CrowdStrike. The incident led to disruptions affecting businesses and government operations worldwide.
While Ives still regards CrowdStrike as the benchmark in cybersecurity, the recent outage suggests that there is significant potential for Microsoft to expand its cybersecurity capabilities, especially given the unexpected turn of events with Google’s acquisition attempt.