Wiz’s decision to reject Google’s acquisition offer could greatly affect the tech industry, especially Microsoft.
Initially, Google aimed to purchase the Israeli cybersecurity startup Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company has turned down the offer. Rappaport described the decision as “tough,” highlighting his desire to focus on growing Wiz toward reaching $1 billion in annual revenue and preparing for an initial public offering (IPO).
This acquisition would have enhanced Google’s cybersecurity capabilities, particularly following a significant disruption caused by CrowdStrike, a major player in the field, last week. Wedbush analyst Dan Ives noted that concerns from investors and ongoing antitrust challenges contributed to the deal’s collapse. Google has faced heightened scrutiny over its market practices and recently concluded its trial related to one of two major cases from the Department of Justice.
Ives indicated that the failed acquisition would have ripple effects throughout the tech sector. He expects Google to intensify efforts to expand its cybersecurity initiatives, a strategy that Microsoft may also pursue.
Consolidation in the cybersecurity industry is seen as necessary, and Ives anticipates that Microsoft may explore options to enhance its cybersecurity platform in the next year to 18 months. Microsoft was recently under scrutiny due to a global IT outage linked to a faulty update from CrowdStrike, which significantly impacted businesses and government operations.
While Ives still regards CrowdStrike as a top-tier cybersecurity provider, the recent outage underscores the need for Microsoft to strengthen its cybersecurity capabilities, further encouraged by Google’s unsuccessful acquisition attempt.