Wiz’s decision to decline Google’s acquisition offer could have significant repercussions for the technology sector, particularly for Microsoft.
Google aimed to purchase the Israeli cybersecurity firm Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the firm had opted out of the deal. Rappaport cited the desire to focus on growing Wiz’s revenue to $1 billion annually and pursuing an initial public offering (IPO) as the reasons for the decision.
The acquisition would have strengthened Google’s position in the cybersecurity market, especially following a major outage linked to CrowdStrike, a significant player in the industry, which recently raised concerns about cybersecurity reliability. According to Wedbush analyst Dan Ives, investor apprehensions and ongoing antitrust challenges faced by Google contributed to the deal’s collapse. Google is currently under scrutiny due to its antitrust issues and has just concluded a trial associated with a Department of Justice case.
Ives noted that the fallout from the failed acquisition could have widespread effects across the tech sector. Despite this setback, he anticipates that Google will continue to enhance its cybersecurity capabilities, and he predicts that Microsoft might seize this opportunity to strengthen its own cybersecurity offerings in the next 12 to 18 months.
The recent global IT outage, which was caused by a problematic update to CrowdStrike’s cybersecurity software, placed Microsoft in a challenging position, as it relies on CrowdStrike to protect its Windows operating system from cyber threats. The disruption affected various sectors, including businesses, airports, and government operations, with users encountering significant system failures.
Although Ives still regards CrowdStrike as a leading standard in cybersecurity, the recent issues indicate that Microsoft could benefit from expanding its cybersecurity offerings, a possibility that is now further encouraged by the failed Wiz-Google deal.