Wiz’s decision to reject Google’s acquisition offer may significantly impact the tech industry, particularly Microsoft. Google was poised to acquire the Israeli cybersecurity startup Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced the company would not proceed with the deal. Rappaport explained that this difficult decision was made with the goal of steering Wiz toward achieving $1 billion in annual revenue and planning for an initial public offering.
The failure of this acquisition is noteworthy, especially as it would have strengthened Google’s position in cybersecurity, a field that has garnered increased attention following a major outage caused by CrowdStrike, a prominent industry player, last week. Analyst Dan Ives from Wedbush suggested in a research note that concerns from investors and ongoing antitrust scrutiny led to the deal’s collapse. Google has faced intense scrutiny over antitrust issues and recently completed a trial related to one of two significant cases brought by the Department of Justice.
Ives highlighted that the absence of this deal could create ripple effects across the tech sector. He predicted that Google would likely increase its focus on expanding its cybersecurity capabilities, and Microsoft would also pursue similar strategies.
Ives noted, “We believe consolidation is overdue in the cybersecurity sector, and we would expect Microsoft to potentially pursue this direction to enhance its cybersecurity platform over the next 12 to 18 months.”
Microsoft found itself in a challenging spotlight following a global IT outage linked to a flawed update to cybersecurity software from CrowdStrike, which crippled systems worldwide. Users reported experiencing severe disruptions, including Microsoft’s infamous “blue screens of death.” Although Ives considers CrowdStrike to still be a leading name in cybersecurity, the recent outage underscores the critical need for Microsoft to strengthen its cybersecurity framework, and the lack of the Wiz deal could pave the way for further developments in this area.