Wiz’s decision to decline Google’s acquisition offer could significantly impact the tech landscape, particularly for Microsoft.
Google was preparing to acquire Israeli cybersecurity firm Wiz for $23 billion, but the deal fell through on Tuesday. Wiz CEO Assaf Rappaport explained that he made the difficult choice to reject the offer in favor of focusing on the company’s growth toward achieving $1 billion in annual revenue and pursuing an initial public offering (IPO).
This decision comes on the heels of a cyber incident involving CrowdStrike, which recently experienced a major outage. The deal would have enhanced Google’s cybersecurity capabilities, but according to Wedbush analyst Dan Ives, investor apprehensions and ongoing antitrust issues played a major role in the deal’s collapse. Google has faced increased scrutiny from regulators and has recently concluded a trial related to two significant cases brought by the Department of Justice.
Ives noted that the failure of the Wiz acquisition could have far-reaching effects within the industry. He suggested that Google is likely to intensify its efforts to expand its cybersecurity division, a strategy that Microsoft may also pursue. He emphasized that the cybersecurity sector is overdue for consolidation and predicted that Microsoft could potentially seek to enhance its cybersecurity portfolio over the next year to 18 months.
The recent CrowdStrike outage, which affected Microsoft’s systems and led to widespread issues for users globally, highlighted vulnerabilities in Microsoft’s cybersecurity framework. While Ives maintains that CrowdStrike remains a leading player in the cybersecurity field, the incident underscores the need for Microsoft to strengthen its own cybersecurity offerings. The failed acquisition of Wiz further opens opportunities for Microsoft in this endeavor.