Wiz’s decision to reject Google’s acquisition offer could have significant consequences for Microsoft and the broader tech industry.
Wiz, an Israeli cybersecurity startup, was in discussions for a $23 billion deal with Google, but the offer was turned down by CEO Assaf Rappaport, who decided to prioritize the company’s growth toward a target of $1 billion in annual revenue and a potential initial public offering (IPO). This deal, if completed, would have strengthened Google’s cybersecurity portfolio, especially following a major outage attributed to CrowdStrike, a significant player in the industry, last week.
Wedbush analyst Dan Ives pointed to investor apprehensions and ongoing antitrust challenges as key reasons for the deal falling through. Google has faced mounting antitrust scrutiny in recent years and recently concluded a major trial with the Department of Justice regarding such issues.
Ives indicated that the decision not to proceed with the acquisition could lead to broader implications across the tech sector. He anticipates that Google will likely continue to invest heavily in expanding its cybersecurity capabilities, and he expects Microsoft to follow suit.
“Consolidation in the cybersecurity sector is overdue, and we foresee Microsoft potentially exploring avenues to enhance its cybersecurity offerings in the next 12 to 18 months,” Ives noted.
Microsoft recently garnered negative attention due to a global IT outage stemming from a problematic CrowdStrike software update that affected its Windows systems. This disruption led to significant issues for businesses, flights, and government functions worldwide. While CrowdStrike remains regarded as a leading cybersecurity provider, the incident underscores the need for Microsoft to strengthen its cybersecurity measures, especially following the collapse of the Wiz deal.