Wiz’s decision to back out of a potential acquisition by Google could significantly affect Microsoft and the broader tech industry. The Israeli cybersecurity firm was approached by Google for a $23 billion deal, but CEO Assaf Rappaport recently announced that they would decline the offer. Rappaport stated that the choice, although difficult, was made in favor of pursuing sustained growth and the goal of achieving $1 billion in annual revenue before considering an IPO.
This acquisition would have strengthened Google’s cybersecurity division, especially following a recent major outage affecting the industry, which was linked to CrowdStrike’s software. Wedbush analyst Dan Ives noted that concerns from investors and ongoing antitrust issues surrounding Google led to the collapse of the deal. The tech giant has faced significant antitrust scrutiny in recent years, culminating in a trial related to two major cases filed by the Department of Justice.
Ives indicated that the failed deal will likely have ripple effects throughout the cybersecurity sector. He anticipates Google will continue to focus on expanding its cybersecurity presence, a strategy that will mirror Microsoft’s efforts in the same area.
He highlighted that consolidation in the cybersecurity market is overdue and predicted that Microsoft might seek to strengthen its cybersecurity platform in the next year to 18 months. Microsoft recently faced scrutiny amid a global IT outage attributed to a problematic update in its cybersecurity software supplied by CrowdStrike, which caused disruptions worldwide. While Ives maintains that CrowdStrike remains a leading provider in cybersecurity, the incident underscores the need for Microsoft to bolster its capabilities in this critical domain, further emphasized by Google’s failed acquisition of Wiz.