Wiz’s decision to decline Google’s acquisition offer could significantly impact Microsoft and the broader tech sector.
Google sought to purchase Israeli cybersecurity startup Wiz for $23 billion, but the deal fell through when Wiz’s CEO Assaf Rappaport opted to reject the offer. He explained that this tough choice was made to focus on growing Wiz towards generating $1 billion in annual revenue and planning for an IPO.
Had the acquisition proceeded, it would have strengthened Google’s position in cybersecurity, particularly in light of a recent major outage linked to CrowdStrike that raised concerns in the industry. According to Wedbush analyst Dan Ives, factors such as investor apprehension and ongoing antitrust issues contributed to the collapse of the deal. Google is currently under significant scrutiny for antitrust practices and has just concluded a trial related to one of two significant cases from the Department of Justice.
Ives noted that the failure of the Wiz deal will have “ripple impacts” across the tech sector and suggested that Google will likely continue to focus on expanding its cybersecurity initiatives. Similarly, he indicated that Microsoft might also seek to enhance its cybersecurity offerings in the coming year and a half.
Microsoft faced scrutiny recently following a global IT outage caused by a malfunction in the cybersecurity software provided by CrowdStrike. Reports of the failure affected users worldwide, leading to significant disruptions. Ives acknowledged that while CrowdStrike is still regarded highly in the cybersecurity field, this incident highlights the need for Microsoft to strengthen its cybersecurity capabilities, especially with the doors now more open after Google’s failed acquisition.