Wiz’s decision to reject Google’s acquisition offer could significantly affect Microsoft and the broader tech industry.
Google had aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company will remain independent, prioritizing its goal of reaching $1 billion in annual revenue and pursuing an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity division, especially following a major outage last week caused by CrowdStrike, a leading cybersecurity firm. Analyst Dan Ives from Wedbush noted that concerns about investors and antitrust issues ultimately led to the collapse of the deal. Google has faced intense scrutiny regarding its market practices and recently concluded a trial related to a major antitrust case with the Department of Justice.
Ives stated that the collapse of this deal could create ripple effects throughout the tech sector. He also suggested that Google will likely intensify its efforts to expand its cybersecurity capabilities despite the setback with Wiz, a strategy that Microsoft may also adopt.
The cybersecurity space appears ripe for consolidation, and Ives anticipates that Microsoft may explore potential acquisitions to enhance its cybersecurity platform within the next 12 to 18 months. Microsoft recently faced criticism during a widespread IT outage linked to an issue in its systems provided by CrowdStrike, emphasizing the need for improvement in its cybersecurity offerings. With the Wiz deal falling through, Microsoft has an increased opportunity to strengthen its cybersecurity business.