Wiz’s decision to turn down Google’s acquisition offer could have significant repercussions for the tech industry, particularly for Microsoft.
Google had aimed to acquire Israeli cybersecurity firm Wiz for $23 billion, but the startup’s CEO, Assaf Rappaport, announced on Tuesday that it would decline the offer. Rappaport stated that the choice was difficult but necessary to focus on growing Wiz towards an annual revenue of $1 billion and an eventual IPO.
This acquisition would have strengthened Google’s cybersecurity division, especially in light of a major incident involving CrowdStrike, which caused widespread disruptions in the cybersecurity realm last week. Wedbush analyst Dan Ives noted that concerns from investors and existing antitrust issues surrounding Google contributed to the deal collapsing. Google has faced heightened scrutiny from regulatory bodies and has just concluded one of its major antitrust trials led by the Department of Justice.
Ives highlighted in a message to investors that the failed acquisition could lead to broader impacts across the technology sector. He anticipated that Google would continue efforts to enhance its cybersecurity capabilities, a direction also expected from rival Microsoft.
He suggested that the cybersecurity sector is ripe for consolidation and indicated that Microsoft might seek opportunities to strengthen its cybersecurity offerings in the next 12 to 18 months. Microsoft faced its own challenges recently when a global IT outage linked to CrowdStrike’s software update disrupted various services, leading to widespread frustration among users. Although Ives still regards CrowdStrike as a leader in cybersecurity, the incident underscores the need for Microsoft to enhance its cybersecurity efforts, particularly following the collapse of the Wiz deal.