Wiz’s decision to decline Google’s acquisition offer may generate significant repercussions for Microsoft and the tech sector as a whole.
Google had intended to purchase the Israeli cybersecurity firm Wiz for $23 billion, but the startup’s CEO, Assaf Rappaport, announced on Tuesday their choice to reject the offer. Rappaport described this as a “tough” decision aimed at allowing Wiz to focus on its goal of achieving $1 billion in annual revenue and a future initial public offering.
This acquisition would have strengthened Google’s cybersecurity division, especially following a recent major outage linked to industry leader CrowdStrike. Dan Ives, an analyst from Wedbush, stated in a research note that escalating investor concerns and ongoing antitrust investigations led to the collapse of the deal. Google has faced increasing antitrust scrutiny in recent years and recently concluded a major trial with the Department of Justice.
Ives suggested that the cancellation of the acquisition deal will have a ripple effect across the tech sector. He noted that Google is likely to continue enhancing its cybersecurity capabilities despite the setback with Wiz, a trend that could also extend to Microsoft.
He indicated that the cybersecurity industry is overdue for consolidation and predicted that Microsoft might look to strengthen its own cybersecurity offerings in the upcoming 12 to 18 months. This comes shortly after Microsoft was scrutinized due to a global IT outage caused by a defective update from CrowdStrike, which is used to help protect Microsoft’s systems.
Although Ives maintains that CrowdStrike remains the “gold standard” for cybersecurity, the recent outage highlights a potential need for Microsoft to enhance its cybersecurity infrastructure, with the failed acquisition presenting new opportunities for further development in this area.