Wiz’s decision to decline Google’s $23 billion acquisition offer could significantly impact the tech industry, particularly Microsoft. Wiz, an Israeli cybersecurity startup, opted out of the deal as CEO Assaf Rappaport aims to grow the company toward achieving $1 billion in annual revenue and pursuing an IPO.
The acquisition would have strengthened Google’s cybersecurity division, especially following a major outage by CrowdStrike that unsettled the cybersecurity landscape last week. Analyst Dan Ives from Wedbush noted that investor apprehensions and ongoing antitrust challenges led to the collapse of the deal. With Google facing intense scrutiny from regulators, having recently completed a trial related to antitrust issues, Ives believes this situation creates broader implications for the sector.
He mentioned that despite the failed acquisition, Google is likely to intensify its efforts to expand its cybersecurity capabilities, a sentiment echoed for Microsoft as well. Ives suggested that consolidation in the cybersecurity market is necessary, predicting that Microsoft might seek to enhance its cybersecurity platform within the next 12 to 18 months.
Microsoft recently faced negative attention due to a global IT outage attributed to a problematic update in its security software, which relies on CrowdStrike’s protection measures. Users reported experiencing issues such as the infamous “blue screens of death,” causing widespread disruptions across various sectors. While Ives still regards CrowdStrike as a leading player in cybersecurity, the recent outage underscores the need for Microsoft to strengthen its cybersecurity strategies further. The rejection of the Wiz deal only amplifies this urgency.