Wiz’s decision to decline Google’s acquisition offer could significantly impact the tech industry, particularly for Microsoft.
Google had aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company would not accept the offer. Rappaport described the choice as “tough,” emphasizing the company’s goal of achieving $1 billion in annual revenue and pursuing an initial public offering (IPO).
The acquisition would have enhanced Google’s cybersecurity portfolio, especially following a major outage last week caused by CrowdStrike, a key player in the industry. In a note to investors, Wedbush analyst Dan Ives attributed the deal’s collapse to investor concerns and ongoing antitrust issues surrounding Google, which has faced extensive scrutiny and recently concluded a significant trial with the Department of Justice.
Ives noted that the failure of this acquisition could trigger “ripple impacts” across the cybersecurity sector. He anticipates that Google will still strive to expand its cybersecurity presence despite the setback, and Microsoft is also expected to take action.
Ives suggested that consolidation in the cybersecurity market is necessary, positing that Microsoft may seek to strengthen its cybersecurity platform in the next 12 to 18 months.
Microsoft’s recent troubles were highlighted during a widespread outage linked to a problematic update to its cybersecurity software provided by CrowdStrike. This incident disrupted various operations, from businesses to flights to government activities, as users encountered issues with Microsoft’s Windows system.
While Ives maintains that CrowdStrike sets the benchmark for cybersecurity, the recent outage indicates a potential need for Microsoft to enhance its cybersecurity efforts, making the failed Wiz acquisition all the more relevant.