Wiz’s decision to decline Google’s acquisition offer could have significant repercussions for Microsoft and the broader technology sector.
The Israeli cybersecurity startup, Wiz, opted against Google’s proposed $23 billion acquisition, as CEO Assaf Rappaport stated that he made the difficult choice to focus on growing the company towards achieving $1 billion in annual revenue and preparing for an IPO.
This acquisition would have enhanced Google’s cybersecurity capabilities, especially following a recent major outage linked to CrowdStrike, a significant player in the industry. Wedbush analyst Dan Ives highlighted in a recent research note that concerns among investors and antitrust challenges played a role in the collapse of the deal. Google has faced considerable antitrust scrutiny over the past few years, culminating in a recent trial concerning two significant cases brought forth by the Department of Justice.
Ives indicated that the failure of the Wiz deal is likely to have ripple effects throughout the sector. He anticipates that Google will continue to aggressively expand its cybersecurity presence, a trend expected to be mirrored by Microsoft as well.
Ives believes that consolidation is necessary within the cybersecurity industry and expects Microsoft to pursue this route, enhancing its cybersecurity platform in the next 12 to 18 months. Microsoft’s profile was notably impacted during a recent global IT outage caused by a problematic update from CrowdStrike, which significantly affected its users. Despite recognizing CrowdStrike as a leading entity in the cybersecurity realm, the incident acts as a reminder for Microsoft to strengthen its cybersecurity operations, and the dissolution of the deal with Wiz may present further opportunities in this regard.