Wiz’s decision to turn down Google’s acquisition offer could significantly impact the tech landscape, particularly for Microsoft.
Google had proposed acquiring the Israeli cybersecurity company Wiz for $23 billion, but on Tuesday, Wiz’s CEO Assaf Rappaport announced the company would decline the offer. Rappaport described this as a difficult choice, aiming instead to focus on growing Wiz towards $1 billion in annual revenue and pursuing an initial public offering.
This acquisition was expected to enhance Google’s cybersecurity division, especially following a major outage attributed to CrowdStrike, an industry leader, that occurred last week. Dan Ives, an analyst at Wedbush, noted in a research report that various factors, including investor apprehensions and antitrust challenges, contributed to the collapse of the deal. Google has faced significant antitrust scrutiny and recently concluded a trial related to one of two significant cases initiated by the Department of Justice.
Ives indicated that the lack of this deal would create ripple effects throughout the industry, suggesting that Google would continue its efforts to strengthen its cybersecurity capabilities, as would Microsoft. He stated, “Consolidation is overdue in the cybersecurity sector,” anticipating that Microsoft may pursue similar strategies to enhance its cybersecurity platform in the next year to 18 months.
Microsoft recently faced scrutiny of its own following a widespread IT outage caused by a problematic update from CrowdStrike. Users reported numerous issues, disrupting business operations, flights, and government functions worldwide. While Ives acknowledged that CrowdStrike remains a leading cybersecurity service, the incident suggests that Microsoft could benefit from strengthening its cybersecurity offerings, a need underscored by the failure of the Google-Wiz deal.