Wiz’s decision to reject the $23 billion acquisition offer from Google could have significant repercussions for the technology sector, particularly Microsoft. The Israeli cybersecurity startup made the announcement on Tuesday, with CEO Assaf Rappaport stating that the choice was challenging but necessary for the company to focus on reaching an annual revenue of $1 billion and pursuing an initial public offering (IPO).
This potential acquisition would have enhanced Google’s cybersecurity capabilities, especially following a recent major outage experienced by CrowdStrike, a key player in the industry. Wedbush analyst Dan Ives highlighted that investor apprehensions and antitrust concerns contributed to the deal’s collapse. Google has faced intense scrutiny regarding antitrust issues and recently concluded its trial in a significant case brought by the Department of Justice.
According to Ives, the failure of this deal could create broader implications throughout the industry. He anticipates that Google will continue its efforts to expand its cybersecurity operations, a sentiment echoed for Microsoft, its primary competitor.
Ives noted, “We believe consolidation is overdue in the cybersecurity sector and expect Microsoft to explore opportunities to enhance its cybersecurity platform over the next 12 to 18 months.”
Microsoft attracted negative attention during a global IT outage caused by a problematic update to CrowdStrike’s cybersecurity software, affecting users worldwide and disrupting various sectors, including businesses and government services. While Ives referred to CrowdStrike as the “gold standard” in cybersecurity, the incident could indicate a need for Microsoft to strengthen its cybersecurity offerings, particularly in light of Google’s abandoned acquisition.