Wiz’s decision to reject Google’s acquisition offer could have significant consequences for Microsoft and the tech industry as a whole.
Google had aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but the deal fell through this week after Wiz CEO Assaf Rappaport decided against accepting the offer. Rappaport expressed that, despite the allure of the massive financial offer, the company is focused on its goal of reaching $1 billion in annual revenue and pursuing an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity portfolio, particularly following a major outage linked to cybersecurity provider CrowdStrike just days earlier. Analyst Dan Ives from Wedbush noted that concerns among investors and ongoing antitrust issues contributed to the collapse of the deal. Google has faced intense examination regarding antitrust matters and recently concluded one of its trials related to a significant case brought by the Department of Justice.
Ives suggested that the absence of this deal will have repercussions throughout the industry. He anticipates that Google will continue to pursue growth in its cybersecurity sector, a trend that Microsoft is likely to follow as well.
He remarked, “We believe consolidation is overdue in the cybersecurity sector and we would expect Microsoft to potentially pursue this path and enhance its cybersecurity platform over the next 12 to 18 months.”
Microsoft recently faced scrutiny due to a widespread IT outage linked to a problematic update in its cybersecurity software from CrowdStrike. Users of Microsoft’s Windows operating system reported seeing the notorious “blue screens of death,” affecting various businesses, flights, and government functions worldwide.
While Ives maintains that CrowdStrike remains the leading name in cybersecurity, this recent outage may suggest a need for Microsoft to strengthen its own cybersecurity measures, and the failure of Google’s acquisition may present further opportunities for such enhancements.