Wiz’s decision to reject Google’s acquisition offer could have significant repercussions for Microsoft and the broader tech sector. Google had aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but the deal fell through on Tuesday. Wiz’s CEO, Assaf Rappaport, stated that he chose to decline the offer to focus on growing the company towards achieving $1 billion in annual revenue and preparing for an IPO.
This acquisition would have strengthened Google’s position in the cybersecurity market, especially following a recent significant outage caused by tech giant CrowdStrike. Analyst Dan Ives from Wedbush noted that investor apprehensions and antitrust issues were factors contributing to the deal’s collapse. Google has faced increased scrutiny regarding antitrust matters and recently concluded a trial related to these issues.
Ives expressed in a note to investors that the failed deal would create wider implications throughout the sector. He anticipates that Google will intensify efforts to enhance its cybersecurity capabilities despite the setback with Wiz. Similarly, Microsoft is expected to take proactive measures to bolster its own cybersecurity services in the next 12 to 18 months.
The situation highlights Microsoft’s vulnerabilities, especially in light of the global IT outage triggered by a faulty update to CrowdStrike’s cybersecurity software, which affected numerous Microsoft users worldwide. While Ives maintains that CrowdStrike remains a leader in cybersecurity, the incident suggests that Microsoft may need to strengthen its cybersecurity offerings, and the dissolution of the Wiz deal could facilitate this effort.