Wiz’s decision to decline Google’s $23 billion acquisition offer could significantly impact the tech industry, particularly for Microsoft.
The Israeli cybersecurity startup Wiz opted out of what would have been Google’s largest acquisition after CEO Assaf Rappaport deemed it a challenging choice to refuse the substantial offer. Instead, Wiz aims to focus on achieving $1 billion in annual revenue and pursuing an initial public offering.
This acquisition would have enhanced Google’s cybersecurity capabilities, especially following a recent major disruption in the cybersecurity landscape caused by an outage from industry player CrowdStrike. Analyst Dan Ives from Wedbush indicated that investor apprehensions and antitrust challenges contributed to the deal’s failure. Google has been under heavy antitrust scrutiny and recently wrapped up a significant trial related to such issues.
Ives expressed that the collapse of the deal would have broader repercussions throughout the sector. He anticipates that Google will persist in expanding its cybersecurity initiatives despite the setback with Wiz, and he expects Microsoft to follow suit.
Ives mentioned the need for consolidation in the cybersecurity sector, projecting that Microsoft may seek to enhance its cybersecurity platform in the next 12 to 18 months. Microsoft recently faced criticism due to a global IT outage linked to a problematic update from CrowdStrike, which brought attention to potential deficiencies in its cybersecurity operations. While Ives maintains that CrowdStrike is regarded as a leader in cybersecurity, he suggested that the incident underscores Microsoft’s need to strengthen its cybersecurity capabilities, an opportunity further widened by the abandoned Wiz deal.