Wiz’s decision to walk away from Google’s acquisition offer could significantly affect Microsoft and the broader tech industry.
Google’s plan to acquire Israeli cybersecurity firm Wiz for $23 billion has fallen through, as Wiz’s CEO Assaf Rappaport announced on Tuesday that the company would not accept the offer. Rappaport described the choice as a difficult one, emphasizing Wiz’s goal of building toward $1 billion in annual revenue and preparing for an initial public offering.
The acquisition would have enhanced Google’s cybersecurity capabilities, especially in light of recent vulnerabilities highlighted by a widespread outage from CrowdStrike, a major player in the industry. According to Wedbush analyst Dan Ives, concerns from investors and antitrust challenges contributed to the deal’s failure. Google has been under significant antitrust scrutiny and recently concluded a trial tied to allegations from the Department of Justice.
Ives noted that the fallout from this failed acquisition will have far-reaching consequences across the tech sector. He anticipates that Google will continue to prioritize the expansion of its cybersecurity initiatives, as will Microsoft, its main competitor.
Ives expressed that consolidation within the cybersecurity sector is overdue and predicted that Microsoft might pursue similar acquisitions to enhance its cybersecurity platform in the upcoming 12 to 18 months. This speculation follows a recent global IT outage linked to a problematic update to software from CrowdStrike, which had serious repercussions on Microsoft’s operations. Users reported extensive system failures, disrupting various sectors worldwide.
While Ives regards CrowdStrike as a leader in cybersecurity, the recent outage suggests that strengthening its cybersecurity capabilities could benefit Microsoft, and the collapse of Google’s deal with Wiz opens up new possibilities in that direction.