Wiz’s decision to decline Google’s acquisition offer could significantly impact Microsoft and the broader tech landscape. Google had aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but CEO Assaf Rappaport announced on Tuesday that the company would not take the deal. Rappaport stated that the choice was difficult but necessary for Wiz to pursue its goal of generating $1 billion annually in revenue and preparing for an initial public offering.
This acquisition would have enhanced Google’s cybersecurity capabilities, especially after a major service disruption linked to CrowdStrike impacted the cybersecurity sector last week. Wedbush analyst Dan Ives noted that the collapse of the deal was influenced by investor hesitations and ongoing antitrust challenges faced by Google, which has recently concluded a significant trial related to these issues.
Ives indicated that the fallout from this deal’s failure would resonate throughout the industry. He suggested that Google would likely intensify its efforts to expand its cybersecurity initiatives despite the setback. Microsoft is also expected to respond in kind.
Ives expressed that consolidation in the cybersecurity industry is necessary and predicted that Microsoft might look to strengthen its own cybersecurity offerings in the next 12 to 18 months. This comes in the wake of a considerable IT outage that stemmed from a problematic update to CrowdStrike’s software, which affected Microsoft’s systems. Users reported issues such as the infamous “blue screens of death,” resulting in widespread disruption to businesses, air travel, and government functions.
While Ives maintains that CrowdStrike remains a leader in cybersecurity, the incident highlights the need for Microsoft to enhance its cybersecurity infrastructure, and the failed Google deal may further drive this change.