Wiz’s decision to not proceed with Google’s acquisition offer could significantly impact the tech industry, particularly Microsoft.
Google had aimed to acquire Israeli cybersecurity firm Wiz for $23 billion, but the deal was rejected by Wiz’s CEO Assaf Rappaport, who stated that the choice was challenging but necessary for the company to focus on reaching $1 billion in annual revenue and preparing for an initial public offering.
This acquisition would have strengthened Google’s cybersecurity division, especially following a major outage linked to CrowdStrike that disrupted operations across various sectors last week. Analyst Dan Ives from Wedbush indicated that the breakdown of this deal stemmed from investor apprehensions and ongoing antitrust issues faced by Google, which has recently concluded a high-profile trial concerning its practices.
Ives noted that the failure of the Wiz acquisition could produce ripple effects throughout the cybersecurity sector. He expects Google to continue enhancing its cybersecurity efforts, a strategy that Microsoft is also likely to pursue.
He suggested that consolidation within the cybersecurity field is overdue, predicting that Microsoft might take steps to strengthen its own cybersecurity portfolio in the next 12 to 18 months. The recent outage, caused by a problematic update to CrowdStrike’s software that hit Microsoft, has further underscored the need for improvement in their cybersecurity offerings. While Ives still considers CrowdStrike a leader in the field, the incident highlights an area where Microsoft could enhance its capabilities, especially now that the Wiz deal has fallen through.