Wiz’s decision to decline Google’s acquisition bid could significantly impact the technology sector, particularly Microsoft.
Google had aimed to purchase the Israeli cybersecurity firm Wiz for $23 billion, but the company announced on Tuesday that it would not proceed with the deal. Wiz CEO Assaf Rappaport explained that he made the challenging choice to reject the substantial offer to focus on growing Wiz towards achieving $1 billion in annual revenue and preparing for an initial public offering.
This acquisition would have enhanced Google’s position in the cybersecurity market just as it faced major challenges, following a recent significant outage attributed to cybersecurity firm CrowdStrike. Dan Ives, an analyst from Wedbush, indicated in a recent report that concerns among investors and ongoing antitrust inquiries likely contributed to the cancellation of the deal. Google has been under considerable antitrust scrutiny and recently concluded a trial related to one of two major cases initiated by the Department of Justice.
Ives noted that the failure of the deal is expected to have widespread effects throughout the tech industry. He mentioned that Google would likely continue to strengthen its cybersecurity capabilities, and he anticipates that Microsoft will also pursue similar strategies.
According to Ives, there is a pressing need for consolidation within the cybersecurity sector, and he expects Microsoft to seek enhancements to its cybersecurity platform in the next year or so. Microsoft gained negative attention following a global IT outage resultant from a problematic update to CrowdStrike’s cybersecurity software. Users worldwide experienced issues, such as the notorious “blue screens of death,” which disrupted business operations, air travel, and government activities.
Despite this incident, Ives labeled CrowdStrike as the “gold standard” in cybersecurity; however, the outage underscores the necessity for Microsoft to enhance its cybersecurity offerings, a gap that the failure of Google’s acquisition bid could allow it to fill.