Wiz’s decision to walk away from Google’s acquisition offer may significantly affect Microsoft and the broader tech landscape.
Initially, Google aimed to purchase the Israeli cybersecurity firm Wiz for $23 billion, but the offer was rejected by Wiz on Tuesday. CEO Assaf Rappaport stated that despite the substantial sum, he chose to decline the deal to focus on enhancing Wiz’s revenue, targeting a goal of $1 billion annually and a future IPO.
This outcome comes on the heels of a major disruption in the cybersecurity sector, triggered by an outage from industry leader CrowdStrike last week. Following the news of the deal’s collapse, Wedbush analyst Dan Ives noted that the situation was exacerbated by investor concerns and ongoing antitrust issues facing Google, which recently concluded one of two significant trials led by the Department of Justice.
Ives expressed that the fallout from this non-deal would reverberate throughout the industry. He indicated that despite losing the Wiz acquisition, Google is likely to continue expanding its cybersecurity capabilities, and Microsoft is expected to follow a similar path.
Ives predicted, “We believe consolidation is overdue in the cybersecurity sector, and we would expect Microsoft to potentially pursue opportunities to strengthen its own cybersecurity platform over the next 12 to 18 months.”
Microsoft recently faced criticism due to a global IT outage linked to a malfunctioning update from CrowdStrike, which compromised its cybersecurity software. This incident generated widespread reports of “blue screens of death” from users and disrupted various sectors, including businesses, flights, and government operations.
Although Ives maintains that CrowdStrike remains the “gold standard” in cybersecurity, the recent outage suggests that Microsoft may need to enhance its security offerings. The breakdown of Google and Wiz’s negotiations could create further opportunities for Microsoft in the cybersecurity realm.