Wiz’s decision to reject Google’s acquisition offer could have significant repercussions for Microsoft and the broader tech landscape.
Google was aiming to acquire the Israeli cybersecurity firm Wiz for $23 billion. However, Wiz’s CEO Assaf Rappaport announced on Tuesday that the company would not accept the offer, opting instead to focus on achieving $1 billion in annual revenue and pursuing an IPO.
This acquisition would have enhanced Google’s cybersecurity portfolio, especially following a recent major outage involving CrowdStrike, an industry leader. Analyst Dan Ives from Wedbush noted that the failed deal stemmed from investor apprehensions and ongoing antitrust scrutiny surrounding Google. The company is currently navigating intense legal challenges from the Department of Justice.
Ives expressed that the collapse of the acquisition could lead to significant effects across the tech sector. He anticipates that Google will continue to invest in growing its cybersecurity division despite the rejection of the Wiz deal. Similarly, Microsoft is expected to pursue consolidation in the cybersecurity landscape in the next 12 to 18 months.
Microsoft’s visibility increased recently due to a widespread IT outage linked to a faulty update from CrowdStrike, which impacted a series of services reliant on their software. Reports surfaced of users encountering serious issues, disrupting businesses and governmental operations globally.
While Ives maintains that CrowdStrike remains a leading figure in cybersecurity, the incident could indicate a pressing need for Microsoft to enhance its own cybersecurity capabilities, paving the way for further developments following Google’s unsuccessful bid.