Wiz’s decision to decline Google’s acquisition bid may have significant repercussions for Microsoft and the broader tech industry. The Israeli cybersecurity startup was offered $23 billion by Google, but its CEO, Assaf Rappaport, opted to reject the deal to focus on achieving $1 billion in annual revenue and pursuing an initial public offering.
This acquisition would have enhanced Google’s cybersecurity operations, particularly following a recent major disruption caused by CrowdStrike, another industry leader. Analyst Dan Ives from Wedbush indicated that investor apprehension and antitrust challenges contributed to the collapse of the deal. Google has faced heightened scrutiny regarding antitrust issues, notably completing a trial linked to one of two significant cases brought by the Department of Justice.
Ives highlighted that the absence of this deal is likely to have ripple effects throughout the sector. He foresees Google intensifying its efforts to expand its cybersecurity capabilities, a trend that Microsoft will likely follow as well. Ives suggested that consolidation within the cybersecurity sector is long overdue and expects Microsoft to pursue enhancements to its cybersecurity offerings over the next year and a half.
Microsoft found itself under scrutiny during a global IT outage linked to a faulty update in CrowdStrike’s cybersecurity software. The incident caused widespread disruptions, including issues for businesses, flight operations, and government activities. While Ives maintains that CrowdStrike remains a top-tier provider in cybersecurity, the recent outage raises questions about the need for Microsoft to strengthen its own cybersecurity measures, especially now that the avenue for acquiring Wiz has been closed.