Wiz’s decision to turn down Google’s acquisition offer could significantly impact Microsoft and the broader tech landscape. Google was aiming to acquire the Israeli cybersecurity company for $23 billion, but Wiz’s CEO, Assaf Rappaport, announced on Tuesday that they would not proceed with the deal. Rappaport described the choice as difficult, expressing the desire to focus on growing Wiz with the goal of achieving $1 billion in annual revenue and eventually an initial public offering.
This acquisition would have enhanced Google’s cybersecurity capabilities, especially following a major outage attributed to CrowdStrike, a prominent player in the industry, that occurred recently. Analyst Dan Ives from Wedbush noted that concerns over investor sentiment and antitrust challenges were factors leading to the collapse of the deal. Google has faced significant antitrust scrutiny and has recently concluded its trial regarding one of the major cases with the Department of Justice.
Ives highlighted that the cancellation of the acquisition could have far-reaching effects throughout the sector. Despite the setback, he believes Google will continue to strengthen its cybersecurity initiatives, a sentiment that applies to Microsoft as well.
Ives pointed out that consolidation within the cybersecurity domain is overdue and expects Microsoft to explore enhancing its own cybersecurity offerings in the next 12 to 18 months.
The conversation around Microsoft has intensified recently, especially after users experienced widespread issues stemming from a problematic update to CrowdStrike’s cybersecurity software last week. This incident, which has been labeled a global IT outage, resulted in disruptions affecting businesses, flights, and government functions. Despite Ives maintaining that CrowdStrike remains a leader in cybersecurity, the outage signals a potential need for Microsoft to enhance its cybersecurity strategies, a situation that could be further influenced by Google’s failed acquisition of Wiz.