Wiz’s decision to turn down Google’s acquisition offer could significantly impact the technology sector, particularly Microsoft.
Google aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but Wiz’s CEO Assaf Rappaport announced on Tuesday that the company has opted to reject the offer. Rappaport cited the desire to focus on scaling Wiz towards generating $1 billion in annual revenue and pursuing an initial public offering as the reason for the decision.
This acquisition would have strengthened Google’s cybersecurity division, especially following a recent major outage involving CrowdStrike, a leading cybersecurity firm. Analyst Dan Ives from Wedbush noted that concerns from investors and ongoing antitrust challenges played a key role in the deal’s collapse. Google is currently under extensive antitrust examination, having recently concluded its trial related to one of two significant cases brought by the Department of Justice.
Ives commented on the potential repercussions of this deal not materializing, stating that it could create “ripple impacts” across the cybersecurity industry. He anticipates that Google will continue to enhance its cybersecurity endeavors regardless of the failed acquisition. He also indicated that Microsoft is likely to pursue its own expansion in the cybersecurity sector.
The urgency for consolidation in cybersecurity has increased, and Ives suggests that Microsoft may pursue acquisitions or partnerships to strengthen its platform in the next year and a half. This follows a recent global IT outage caused by a problematic update to CrowdStrike’s cybersecurity software, which underscored vulnerabilities in the industry. Although Ives still considers CrowdStrike a leader in cybersecurity, the incident highlights the necessity for Microsoft to enhance its cybersecurity measures, creating further opportunities after Google’s unsuccessful deal with Wiz.