Wiz’s decision to reject Google’s acquisition offer could have significant repercussions for Microsoft and the broader tech industry.
Google had aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but the proposal was turned down by Wiz, as CEO Assaf Rappaport opted to focus on building the company towards a goal of generating $1 billion in annual revenue and preparing for an initial public offering.
This acquisition would have strengthened Google’s position in the cybersecurity sector, particularly in light of recent disruptions caused by a major outage at CrowdStrike, a leading player in the industry. Analyst Dan Ives from Wedbush highlighted that investor apprehensions and ongoing antitrust challenges contributed to the breakdown of the deal. Google has been facing rigorous scrutiny regarding antitrust practices and recently concluded a trial related to significant legal cases from the Department of Justice.
Ives noted in a communication to investors that the collapse of this deal could create widespread effects across the cybersecurity landscape. Despite the setback, he believes Google will persist in expanding its cybersecurity initiatives, a sentiment echoed for Microsoft, its competitor.
He emphasized that there is a pressing need for consolidation within the cybersecurity sector and suggested that Microsoft might pursue similar acquisitions to enhance its cybersecurity offerings in the next 12 to 18 months.
Last week, Microsoft faced backlash due to a global IT outage linked to its cybersecurity software, provided by CrowdStrike. This incident caused significant operational disruptions for users worldwide, further underscoring the importance of strengthening its cybersecurity capabilities, especially in light of Google’s failed acquisition attempt.