Wiz’s decision to reject Google’s acquisition offer could have significant repercussions for Microsoft and the broader tech industry.
The Israeli cybersecurity startup had been in talks with Google for a potential $23 billion deal, which would have marked Google’s largest acquisition to date. However, Wiz CEO Assaf Rappaport announced on Tuesday that the company has opted out of the agreement, choosing instead to focus on its goal of achieving $1 billion in annual revenue and preparing for an initial public offering.
This development comes shortly after a major cybersecurity incident involving CrowdStrike, which experienced a significant outage that affected numerous companies and government operations worldwide. In a report following the deal’s collapse, Wedbush analyst Dan Ives noted that investor worries and ongoing antitrust investigations likely contributed to Wiz’s decision. Google has faced mounting antitrust scrutiny and has recently concluded a trial concerning one of two significant cases from the Department of Justice.
Ives expressed that the decision not to go through with the deal would have broader implications across the cybersecurity sector. He believes that Google will continue to strengthen its cybersecurity services, and Microsoft, as a competitor, is also expected to enhance its cybersecurity portfolio in the coming year to 18 months.
Microsoft’s need for improvement in this area became apparent during the recent CrowdStrike outage, where issues with its software left users worldwide encountering serious operational challenges. While Ives described CrowdStrike as the leading name in cybersecurity, the recent incident underscores the potential for Microsoft to significantly enhance its cybersecurity capabilities, especially in light of Google’s failed attempt to acquire Wiz.