Wiz’s decision to reject Google’s acquisition offer could significantly impact the technology sector, particularly Microsoft. The Israeli cybersecurity startup turned down a proposed $23 billion deal with Google, with CEO Assaf Rappaport citing a desire to focus on growing the company towards an annual revenue of $1 billion and pursuing an initial public offering.
This acquisition would have strengthened Google’s position in the cybersecurity market, especially in light of a recent major outage from another cybersecurity firm, CrowdStrike. Analyst Dan Ives from Wedbush noted that investor apprehensions and antitrust issues contributed to the collapse of the negotiations. Google remains under considerable scrutiny regarding antitrust matters, having recently concluded one of two critical trials led by the Department of Justice.
Ives indicated that the failed deal would create ripple effects across the cybersecurity landscape. He suggested that Google would likely intensify efforts to expand its cybersecurity offerings, a trend mirrored by Microsoft, which may seek its own acquisitions in the sector over the next year or two.
Microsoft faced criticism due to a significant global IT outage linked to a problematic update in its cybersecurity software, which is powered by CrowdStrike. This incident caused widespread disruptions in various sectors, leading to widespread reports of system failures among Microsoft users. Despite Ives labeling CrowdStrike as the “gold standard” in cybersecurity, this outage underscores the need for Microsoft to strengthen its cybersecurity capabilities, an opportunity that the collapse of the Wiz deal may facilitate.