Wiz’s decision to withdraw from a potential acquisition by Google could significantly affect Microsoft and the broader tech landscape.
Google had proposed acquiring the Israeli cybersecurity firm Wiz for $23 billion, but Wiz’s CEO, Assaf Rappaport, announced on Tuesday that he opted to decline the offer. Rappaport stated that this difficult choice was made to focus on growing Wiz towards achieving annual revenue of $1 billion and preparing for an initial public offering (IPO).
This acquisition would have strengthened Google’s position in cybersecurity, especially following a major outage last week caused by cybersecurity firm CrowdStrike. Analyst Dan Ives from Wedbush noted that investor apprehensions and ongoing antitrust issues contributed to the deal’s collapse. Google has faced intense scrutiny regarding its market practices, with a significant trial recently concluding as part of a broader investigation by the Department of Justice.
Ives remarked that the failed acquisition would have wide-reaching effects within the sector. He believes Google will persist in expanding its cybersecurity initiatives, a strategy that Microsoft is also expected to pursue.
According to Ives, the cybersecurity industry is ripe for consolidation, and he anticipates that Microsoft may consider strengthening its cybersecurity platform over the next 12 to 18 months. Recently, Microsoft was criticized following a global IT outage linked to a problematic update from CrowdStrike. This incident raised concerns about the effectiveness of its cybersecurity measures, compelling Microsoft to reassess and potentially enhance its cybersecurity offerings.