Wiz’s rejection of Google’s acquisition offer could significantly impact Microsoft and the broader tech industry.
Google aimed to purchase the Israeli cybersecurity startup Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that they decided to decline the offer. Rappaport explained that this difficult choice was made to allow Wiz to focus on achieving $1 billion in annual revenue and pursuing an initial public offering (IPO).
The failed acquisition comes in the wake of a major global IT outage linked to cybersecurity firm CrowdStrike, highlighting the urgency for stronger cybersecurity solutions. Analyst Dan Ives from Wedbush noted that various factors, including investor concerns and ongoing antitrust investigations involving Google, contributed to the deal’s collapse. Google’s cybersecurity efforts have faced increased scrutiny, particularly following its recent trial related to antitrust violations.
Ives emphasized that this development could lead to significant repercussions throughout the tech sector. He suggested that Google will likely prioritize expanding its cybersecurity capabilities despite the setback with Wiz, a trend that could also influence Microsoft.
“Our expectation is that consolidation in the cybersecurity market is essential, and we foresee Microsoft potentially pursuing enhancements to its own cybersecurity offerings in the next 12 to 18 months,” Ives remarked.
Additionally, Microsoft faced criticism during the recent CrowdStrike-related outage, which affected numerous businesses and public services globally. Users reported encountering the infamous “blue screens of death” as a result of issues stemming from CrowdStrike’s software updates. While Ives continues to label CrowdStrike as the leading entity in cybersecurity, the outage may indicate a need for Microsoft to reinforce its security measures, with the current landscape further shifting following the unfulfilled Wiz deal.