Wiz’s decision to reject Google’s acquisition offer could have significant repercussions for the technology sector, particularly for Microsoft. The Israeli cybersecurity firm was in talks to be acquired by Google for $23 billion, but CEO Assaf Rappaport announced on Tuesday that Wiz would not proceed with the deal. Rappaport described the decision as “tough,” emphasizing the startup’s goal of achieving $1 billion in annual revenue and planning for an initial public offering.
This acquisition would have enhanced Google’s presence in cybersecurity, especially following a recent major outage linked to CrowdStrike, a key player in the industry. Analyst Dan Ives from Wedbush noted that investor apprehensions and antitrust concerns contributed to the deal’s collapse. Google has faced heightened scrutiny over antitrust issues in recent years and recently concluded a trial related to a significant case brought by the Department of Justice.
Ives indicated that the failed acquisition would have ripple effects throughout the cybersecurity sector. He expects Google to intensify its efforts to expand its cybersecurity capabilities, while Microsoft is likely to follow suit. Ives speculated that consolidation within the cybersecurity space is necessary and anticipated that Microsoft would look to strengthen its cybersecurity offerings over the next 12 to 18 months.
The recent outage attributed to a problematic update from CrowdStrike put Microsoft under scrutiny, as its software is designed to detect and prevent unauthorized access to its operating systems. Global users reported experiencing significant disruptions, prompting discussions about the robustness of Microsoft’s cybersecurity strategies. While Ives maintains that CrowdStrike remains a leading name in cybersecurity, the incident suggests that Microsoft may need to enhance its cybersecurity portfolio, with the failed Google-Wiz deal potentially paving the way for further developments in this area.