Wiz’s decision to reject Google’s acquisition offer could significantly affect the tech landscape, particularly for Microsoft.
Google had planned to purchase the Israeli cybersecurity firm Wiz for $23 billion, but on Tuesday, Wiz CEO Assaf Rappaport announced the company would decline the offer. Rappaport stated that the difficult choice was made to focus on growing Wiz towards generating $1 billion in annual revenue and pursuing an initial public offering (IPO).
This acquisition would have enhanced Google’s cybersecurity division, especially after a major outage linked to a key player in the industry, CrowdStrike, occurred last week. Analyst Dan Ives from Wedbush noted in a research report that concerns from investors and potential antitrust issues contributed to the collapse of this deal. Google’s activities have come under heavy scrutiny from antitrust regulators, culminating in a recent trial concerning one of two significant cases initiated by the Department of Justice.
In his correspondence to investors, Ives predicted that the failure of the Wiz acquisition would create a ripple effect throughout the cybersecurity sector. He suggested that Google would likely continue to aggressively expand its cybersecurity presence, a strategy that could also be mirrored by Microsoft.
Ives mentioned that consolidation within the cybersecurity field is overdue, and he expects Microsoft to pursue enhancing its cybersecurity platform in the next 12 to 18 months.
The heightened emphasis on cybersecurity at this time follows a widespread IT outage linked to a faulty update from CrowdStrike, impacting Microsoft users globally. Reports indicated that users encountered the notorious “blue screens of death.” Despite Ives labeling CrowdStrike as the “gold standard” in cybersecurity, he indicated that this incident suggests Microsoft could benefit from strengthening its cybersecurity offerings, especially in light of Google’s abandoned acquisition attempt.