Wiz’s decision to decline a $23 billion acquisition offer from Google could significantly affect the tech sector, particularly in regards to Microsoft.
Wiz, an Israeli cybersecurity startup, opted out of the deal, which would have represented Google’s largest acquisition to date. Wiz CEO Assaf Rappaport indicated that rejecting the offer was a challenging choice, but it aligns with his goal of driving the company towards $1 billion in annual revenue and pursuing an initial public offering.
This acquisition would have enhanced Google’s cybersecurity capabilities at a time when the industry was already reeling from a substantial outage due to issues with CrowdStrike’s services, affecting numerous sectors worldwide. Analyst Dan Ives from Wedbush pointed out that investor apprehensions and ongoing antitrust investigations contributed to the deal’s collapse. Google has faced significant antitrust challenges in recent years, having recently concluded litigation related to two major cases initiated by the Department of Justice.
Ives mentioned that the fallout from the failed acquisition could send shockwaves throughout the cybersecurity industry. He suggested that, despite the setback, Google is likely to continue investing in its cybersecurity initiatives, a strategy that Microsoft may also adopt in response to its recent challenges.
Given the pressures following the CrowdStrike incident, which disrupted operations across various industries due to a faulty software update, Ives believes that Microsoft may look to strengthen its cybersecurity offerings in the coming year and a half. While CrowdStrike is still regarded as a leader in the field, the incident underscores the necessity for Microsoft to enhance its own cybersecurity capabilities, particularly in the wake of Google’s unsuccessful acquisition attempt.