Wiz’s decision to decline Google’s acquisition offer could significantly affect the tech industry, particularly Microsoft.
Google had aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but on Tuesday, Wiz CEO Assaf Rappaport announced the company’s rejection of the offer. Rappaport stated that the choice was difficult but necessary to focus on growing Wiz towards a target of $1 billion in annual revenue and preparing for an IPO.
The potential acquisition was poised to enhance Google’s cybersecurity business, especially after a major outage linked to the industry leader CrowdStrike that occurred last week. Analyst Dan Ives from Wedbush suggested that concerns from investors and ongoing antitrust issues have contributed to the deal’s collapse. Google has faced extensive antitrust scrutiny recently and recently concluded a trial related to one of two significant cases from the Department of Justice.
In an email to investors, Ives noted that there would be broad repercussions across the cybersecurity sector in light of this failure. He forecasted that Google would persist in expanding its cybersecurity capabilities, a move likely mirrored by its competitor Microsoft.
Ives emphasized the need for consolidation in the cybersecurity market, predicting that Microsoft might pursue similar strategies to enhance its own security platform in the next 12 to 18 months.
Microsoft faced criticism after a global IT outage caused by a flawed update to its cybersecurity software from CrowdStrike. Users reported seeing “blue screens of death,” as businesses, flights, and government functions were disrupted worldwide. Despite Ives referring to CrowdStrike as the “gold standard” of cybersecurity, the incident has underscored the necessity for Microsoft to strengthen its cybersecurity measures, creating further opportunities in light of Google’s failed acquisition.