Wiz’s decision to decline Google’s acquisition offer could have significant ramifications for the tech landscape, particularly for Microsoft.
The Israeli cybersecurity firm was poised to be acquired by Google for $23 billion, but CEO Assaf Rappaport announced on Tuesday that the company would not proceed with the deal. Rappaport described the choice as “tough,” emphasizing Wiz’s commitment to achieving $1 billion in annual revenue and pursuing an initial public offering.
This acquisition would have strengthened Google’s cybersecurity portfolio, especially in light of a major outage caused by CrowdStrike, a key player in the industry, that affected many last week. Wedbush analyst Dan Ives noted that investor apprehensions and ongoing antitrust scrutiny were significant factors in the deal’s collapse. Google has faced intense regulatory challenges and recently concluded a trial linked to one of two significant cases from the Department of Justice.
Ives expressed in a report that the failed deal would have broader implications for the cybersecurity sector. He indicated that Google would likely continue to enhance its cybersecurity efforts, a sentiment he expects will be mirrored by Microsoft.
He stated, “We believe consolidation is overdue in the cybersecurity sector and we would expect Microsoft to potentially pursue this path and strengthen its cybersecurity platform in the next 12 to 18 months.”
Microsoft has been under scrutiny recently due to a widespread IT outage caused by a problematic update from CrowdStrike, which affected many users globally, leading to reports of the “blue screens of death.” While Ives holds that CrowdStrike remains the “gold standard” in cybersecurity, the recent incident suggests that Microsoft could benefit from enhancing its cybersecurity efforts, and the termination of the Wiz deal further paves the way for such development.