Wiz’s decision to decline Google’s acquisition offer may have significant repercussions for Microsoft and the larger tech industry.
Google had aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company would not proceed with the deal. Rappaport described the choice as “tough,” emphasizing Wiz’s focus on building its revenue stream to reach $1 billion annually and pursuing an initial public offering (IPO).
This acquisition would have enhanced Google’s cybersecurity capabilities, particularly following a significant outage linked to industry leader CrowdStrike last week. Dan Ives, an analyst at Wedbush, noted that concerns from investors and ongoing antitrust issues likely contributed to the deal’s collapse. Google has faced increasing antitrust scrutiny and recently concluded a major trial with the Department of Justice.
Ives highlighted that the fallout from this deal not occurring will likely ripple throughout the tech sector. He predicts that Google will continue to strengthen its cybersecurity initiatives in light of the failed acquisition, a path that Microsoft is also expected to follow.
Ives suggested that the cybersecurity sector is ripe for consolidation and anticipates that Microsoft will pursue enhancements to its cybersecurity offerings over the next 12 to 18 months. Microsoft has recently faced scrutiny due to a widespread IT outage related to a malfunction in cybersecurity software from CrowdStrike, which affected numerous users globally. Despite this setback, Ives maintains that CrowdStrike remains the benchmark in cybersecurity, but the incident underscores the need for Microsoft to bolster its own cybersecurity measures, especially as Google’s acquisition efforts falter.