Wiz’s decision to decline Google’s acquisition offer could significantly impact Microsoft and the broader tech landscape.
Google aimed to acquire the Israeli cybersecurity company Wiz for $23 billion, but on Tuesday, Wiz CEO Assaf Rappaport announced the tough choice to reject the offer. Rappaport stated that he wants to focus on growing Wiz towards achieving $1 billion in annual revenue and ultimately pursuing an initial public offering.
Had the deal gone through, it would have strengthened Google’s cybersecurity division, especially after a major outage attributed to CrowdStrike shocked the industry last week. Wedbush analyst Dan Ives noted that concerns from investors and antitrust challenges were key factors in the deal’s collapse. Google has been facing intense scrutiny regarding its business practices and recently concluded a trial related to a significant antitrust case led by the Department of Justice.
Ives indicated that the failure of the Wiz acquisition would have repercussions across the sector. He anticipates that Google will continue to expand its cybersecurity initiatives despite the setback, a sentiment echoed for Microsoft as well.
Ives stated, “We believe consolidation is overdue in the cybersecurity sector and we would expect Microsoft to potentially pursue similar strategies to enhance its cybersecurity platform in the next 12 to 18 months.”
Microsoft faced criticism after a widespread global IT outage, which was linked to a malfunction in its cybersecurity software from CrowdStrike. The incident disrupted various services worldwide, leaving many users encountering issues such as the notorious “blue screens of death.” While Ives affirms that CrowdStrike remains a leader in the cybersecurity field, this incident highlights the necessity for Microsoft to strengthen its cybersecurity capabilities, and the collapse of the Wiz deal may pave the way for further opportunities in this space.