Wiz’s decision to reject Google’s acquisition offer could significantly impact Microsoft and the broader tech landscape.
Google was poised to acquire Israeli cybersecurity startup Wiz for $23 billion, but the deal fell through when Wiz’s CEO, Assaf Rappaport, opted to decline the offer. Rappaport stated that this “tough” decision was made in order to focus on growing Wiz toward an annual revenue goal of $1 billion and preparing for an initial public offering.
This acquisition would have strengthened Google’s cybersecurity capabilities, particularly in light of recent upheaval caused by a major outage from CrowdStrike, a cybersecurity firm, last week. Analyst Dan Ives from Wedbush noted that concerns from investors and antitrust issues played a crucial role in the deal’s collapse. Google has been scrutinized for antitrust practices and recently concluded one of its two major trials initiated by the Department of Justice.
Ives predicts that the failure of the Wiz deal will create ripple effects throughout the tech sector. He asserts that Google is likely to intensify its efforts to expand its cybersecurity offerings, a trend expected to be mirrored by Microsoft’s strategies.
He also expressed that consolidation within the cybersecurity industry is overdue and hinted that Microsoft might pursue opportunities to enhance its cybersecurity platform within the next 12 to 18 months. The tech giant recently faced criticism due to widespread outages linked to a problematic update in its cybersecurity software provided by CrowdStrike, impacting users globally and disrupting services across various sectors.
Despite Ives describing CrowdStrike as the “gold standard” in cybersecurity, the recent incident suggests that Microsoft could benefit from strengthening its cybersecurity initiatives, especially now that the proposed Google-Wiz deal has fallen through.