Wiz’s decision to decline Google’s acquisition offer could significantly impact Microsoft and the technology sector as a whole. Google intended to purchase the Israeli cybersecurity firm Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company would not proceed with the deal. Rappaport described the choice as “tough,” emphasizing Wiz’s focus on building a sustainable business aimed at achieving $1 billion in annual revenue and pursuing an IPO.
The potential acquisition would have strengthened Google’s cybersecurity capabilities, especially following a major outage linked to CrowdStrike, impacting various businesses at the end of last week. According to Wedbush analyst Dan Ives, the collapse of the deal stems from investor apprehensions and ongoing antitrust scrutiny surrounding Google, which recently concluded a trial related to two significant cases from the Department of Justice.
Ives noted that the failure of the Wiz acquisition will likely have ripple effects across the tech industry. He anticipates that Google will continue to enhance its cybersecurity initiatives despite not finalizing the Wiz deal. Microsoft, its main competitor, is also expected to pursue expansion in cybersecurity.
“Consolidation in the cybersecurity sector is overdue, and we would expect Microsoft to potentially pursue opportunities to enhance its cybersecurity offerings within the next 12 to 18 months,” Ives stated.
The situation was further complicated for Microsoft, which faced negative attention due to a widespread IT outage resulting from a flawed update to its cybersecurity software provided by CrowdStrike. This incident caused disruptions globally, affecting businesses and essential services. While Ives considers CrowdStrike to still be a leading entity in cybersecurity, the recent outage highlights the need for Microsoft to strengthen its cybersecurity framework, and Google’s failed acquisition only broadens the possibilities for that enhancement.