The collapse of Google’s proposed acquisition of Israeli cybersecurity startup Wiz, valued at $23 billion, could have significant implications for the tech sector, particularly for Microsoft. Wiz CEO Assaf Rappaport announced the decision to reject Google’s substantial offer, opting instead to focus on growing the company towards an annual revenue target of $1 billion and pursuing an initial public offering.
The acquisition had the potential to enhance Google’s cybersecurity division, especially in light of recent industry disruptions, including a major outage caused by CrowdStrike last week. Analyst Dan Ives from Wedbush attributed the deal’s failure to investor skepticism and ongoing antitrust challenges facing Google, which has been the target of closer regulatory scrutiny.
Ives noted in a statement to investors that the ramifications of the deal not proceeding would extend across the industry. He anticipates that Google will persist in enhancing its cybersecurity initiatives despite the setback with Wiz, a path that may also be pursued by Microsoft.
Ives emphasized the need for consolidation in the cybersecurity market and speculated that Microsoft might take steps to strengthen its cybersecurity offerings in the coming 12 to 18 months. The recent global IT outage caused by a problematic update to CrowdStrike’s software, which identified security threats for Microsoft’s Windows systems, put Microsoft in a challenging position. Many users encountered significant issues as a result of the outage, affecting various sectors including business and government operations.
While Ives regards CrowdStrike as a leading figure in cybersecurity, the incident underscores the importance for Microsoft to consider bolstering its own security capabilities, especially with the additional opportunities arising from Google’s unrealized deal with Wiz.