Wiz’s decision to decline Google’s acquisition offer may have significant ramifications for Microsoft and the broader tech industry.
Google had aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but Wiz’s CEO Assaf Rappaport announced on Tuesday that the company would not proceed with the deal. Rappaport indicated that the choice to reject such a substantial offer was a difficult one, motivated by Wiz’s goal to achieve $1 billion in annual revenue and pursue an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity portfolio right after a major outage that impacted the cybersecurity arena, caused by CrowdStrike, a significant player in the industry. Following the announcement of the deal falling through, Wedbush analyst Dan Ives noted that investor anxiety and ongoing antitrust issues contributed to Wiz’s decision. Google has faced heightened antitrust scrutiny, recently concluding a major trial by the Department of Justice.
Ives opined that the fallout from this deal’s collapse would affect the entire sector. He speculated that Google would intensify its efforts to expand its cybersecurity capabilities despite the missed opportunity with Wiz. This development may also influence Microsoft’s strategy.
Ives suggested that the cybersecurity industry is ripe for consolidation and anticipated that Microsoft might seek to enhance its own cybersecurity offerings in the upcoming year and a half.
Microsoft found itself in a challenging situation during a recent global IT outage linked to a problematic update to its cybersecurity software provided by CrowdStrike. Users worldwide experienced serious disruptions, including “blue screens of death,” affecting various businesses and government operations.
Despite the challenges, Ives emphasized that CrowdStrike remains a leading force in cybersecurity. However, the recent outage indicates that Microsoft may benefit from strengthening its own cybersecurity division, creating further opportunities in the aftermath of Google’s failed acquisition of Wiz.