Wiz’s decision to decline Google’s acquisition offer could significantly affect the tech landscape, particularly impacting Microsoft.
The Israeli cybersecurity startup was in talks to be acquired by Google for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that he opted against the deal. He described this choice as “tough,” clarifying it was made in pursuit of Wiz’s goal to reach $1 billion in annual revenue and eventually go public.
This acquisition would have strengthened Google’s cybersecurity division, especially following a recent major disruption in the industry caused by a significant outage from CrowdStrike. Analyst Dan Ives from Wedbush noted that concerns from investors and ongoing antitrust scrutiny surrounding Google contributed to the collapse of the deal. Google is currently facing intense scrutiny from regulators after concluding a trial involving the Department of Justice.
Ives expressed in a message to investors that the failure of this acquisition will likely create ripple effects across the tech industry, suggesting that Google may intensify its efforts to expand its cybersecurity offerings despite the setback with Wiz. He also anticipates that Microsoft may pursue acquisitions to enhance its cybersecurity platform in the next year to 18 months.
The situation comes in light of a global IT outage last Friday, which affected many users due to a malfunction in CrowdStrike’s software used by Microsoft. This incident, which resulted in widespread disruptions in businesses and government activities, has put additional pressure on Microsoft to improve its cybersecurity capabilities. While Ives regards CrowdStrike as a leading figure in cybersecurity, the recent outage reinforces the notion that Microsoft needs to bolster its defenses, making the landscape more competitive following Google’s unsuccessful deal.