Wiz’s decision to decline Google’s acquisition offer has significant implications for Microsoft and the broader tech sector. Google had proposed to buy the Israeli cybersecurity startup Wiz for $23 billion, but the deal fell through when Wiz CEO Assaf Rappaport opted to reject the substantial offer. Rappaport cited a challenging choice focused on Wiz’s ambition to generate $1 billion in annual revenue and pursue an initial public offering (IPO).
This acquisition was intended to enhance Google’s cybersecurity capabilities, especially following a major outage last week linked to CrowdStrike, a leader in the industry. Following the news of the deal collapse, Wedbush analyst Dan Ives highlighted that concerns about investors and antitrust matters played a role in derailing negotiations. Google’s antitrust issues have been under scrutiny, notably following a recent trial related to major cases from the Department of Justice.
Ives indicated in a note to investors that the fallout from this failed acquisition could ripple across the cybersecurity sector. He believes that Google will continue to focus on expanding its cybersecurity initiatives, while Microsoft is also likely to explore growth in this area. Ives predicted that consolidation in the cybersecurity domain has become overdue, suggesting that Microsoft might pursue strengthening its cybersecurity platform in the next 12 to 18 months.
The situation grew more pressing for Microsoft after the global IT outage last Friday due to a flawed CrowdStrike software update. This incident prompted widespread disruptions for users of Microsoft’s Windows operating system, leading to reports of system failures around the world. While Ives maintains that CrowdStrike remains a benchmark in the industry, the outage underscores the need for Microsoft to enhance its cybersecurity capabilities, a need that will only be amplified by the failed Google-Wiz deal.