Wiz’s decision to decline Google’s acquisition offer could significantly affect Microsoft and the tech industry as a whole.
Google aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but the deal fell through when Wiz’s CEO, Assaf Rappaport, opted to reject the offer. Rappaport indicated that this difficult choice was driven by Wiz’s goal to achieve $1 billion in annual revenue and pursue an initial public offering.
This acquisition would have strengthened Google’s cybersecurity division, especially following a recent major incident involving CrowdStrike, a leading cybersecurity provider, which experienced a significant outage. Dan Ives, a Wedbush analyst, noted that investor apprehensions and ongoing antitrust scrutiny contributed to the deal’s failure. Google has faced considerable regulatory challenges and recently concluded a trial related to its antitrust issues.
Ives mentioned that the fallout from this deal not happening could ripple across the cybersecurity sector. He anticipates that Google will continue to advance its cybersecurity initiatives, as will Microsoft.
He expressed that consolidation within the cybersecurity industry is overdue and suggested that Microsoft might pursue opportunities to enhance its cybersecurity platform in the next 12 to 18 months.
The recent outage caused by a faulty update to CrowdStrike’s software put Microsoft in an unfavorable position, drawing criticism from users who experienced significant disruptions. While CrowdStrike is regarded as a top-tier cybersecurity provider, this incident highlights the need for Microsoft to strengthen its cybersecurity measures, a path that the failed Wiz acquisition might now encourage further exploration of.