Wiz’s decision to decline Google’s acquisition offer could significantly affect Microsoft and the wider tech industry.
Initially, Google sought to acquire Israeli cybersecurity startup Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company would not proceed with the deal. Rappaport described the choice as “tough,” emphasizing Wiz’s goal to achieve $1 billion in annual revenue and prepare for an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity offerings, especially following a recent major outage involving CrowdStrike, a prominent player in the field. Wedbush analyst Dan Ives noted that concerns from investors and antitrust issues were key factors in the deal’s collapse. Google has faced significant antitrust scrutiny recently and has just concluded a trial related to one of two major cases brought by the Department of Justice.
Ives mentioned that the failed acquisition would likely have “ripple impacts across the sector” but expected Google to intensify its focus on expanding its cybersecurity capabilities. Similarly, he anticipated that Microsoft would explore ways to enhance its own cybersecurity platform in the next year to year and a half.
Microsoft faced criticism after experiencing a global IT outage caused by a problematic update from CrowdStrike. This incident raised concerns about the robustness of Microsoft’s cybersecurity measures, as the platform relies on CrowdStrike to safeguard its operating systems. Users reported experiencing system failures, causing disruptions across various sectors, including business and government operations.
While Ives still regards CrowdStrike as a leader in cybersecurity, the recent outage suggests that Microsoft may need to strengthen its cybersecurity infrastructure, a need that has only been amplified by Google’s failed acquisition of Wiz.