Wiz’s decision to reject Google’s acquisition offer could have significant consequences for the tech industry, particularly for Microsoft.
Google had planned to acquire the Israeli cybersecurity company Wiz for $23 billion, but the deal fell through when Wiz’s CEO, Assaf Rappaport, announced the company would focus on its goal of reaching $1 billion in annual revenue and pursuing an initial public offering instead.
This potential acquisition was expected to enhance Google’s cybersecurity capabilities, particularly following a major outage linked to CrowdStrike, a significant player in the cybersecurity field. According to Wedbush analyst Dan Ives, investor apprehensions and ongoing antitrust challenges contributed to the deal’s collapse. Google has faced heightened antitrust scrutiny and recently concluded a trial related to two significant cases from the Department of Justice.
Ives believes the failure of the Wiz acquisition will create ripple effects throughout the sector. He noted that Google will likely seek to further expand its cybersecurity offerings despite the setback, a path that Microsoft is expected to follow as well.
Ives pointed out that consolidation within the cybersecurity industry is necessary and anticipated that Microsoft may consider strengthening its cybersecurity platform over the next year to eighteen months.
Microsoft’s reputation faced scrutiny last week due to a global IT outage linked to a problematic update of its cybersecurity software from CrowdStrike. While CrowdStrike is still regarded as a leading cybersecurity provider, the incident highlighted the need for Microsoft to enhance its cybersecurity measures, with the collapse of the Wiz deal potentially providing further impetus for this move.