Wiz’s decision to reject Google’s acquisition offer could bring significant consequences for Microsoft and the tech industry overall. Google had aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but Wiz’s CEO Assaf Rappaport stated on Tuesday that the company would continue to focus on reaching $1 billion in annual revenue and preparing for an initial public offering (IPO).
The potential acquisition would have enhanced Google’s cybersecurity capabilities, especially following a recent major outage in the cybersecurity field linked to CrowdStrike, a significant player in the industry. Dan Ives, an analyst at Wedbush, noted in a research report that concerns from investors and ongoing antitrust issues led to the deal’s collapse. Google has faced heightened scrutiny regarding antitrust matters and has recently concluded a trial related to one of two major cases brought by the Department of Justice.
Ives pointed out that the failed acquisition will have ripple effects across the sector. He anticipates that Google will intensify its efforts to expand its cybersecurity presence despite the setback with Wiz. Rival Microsoft is also expected to take similar steps.
Ives believes there is a pressing need for consolidation within the cybersecurity industry, suggesting that Microsoft might seek to enhance its cybersecurity platform within the next year to 18 months. Microsoft recently faced criticism following a global IT outage caused by a problematic update in its cybersecurity software supplied by CrowdStrike. Users experienced significant disruptions, leading to a wider impact on businesses and government operations.
Although Ives maintains that CrowdStrike remains a key player in cybersecurity, the incident may indicate a critical opportunity for Microsoft to strengthen its cybersecurity offerings, particularly in light of Google’s failed acquisition.