Wiz’s decision to reject Google’s acquisition offer could significantly affect Microsoft and the broader tech sector.
Google was aiming to acquire the Israeli cybersecurity firm Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company turned down the offer. Rappaport stated that this difficult choice was made to allow Wiz to pursue its goal of generating $1 billion in annual revenue and preparing for an IPO.
This potential acquisition would have strengthened Google’s position in cybersecurity, especially following a substantial outage last week attributed to industry leader CrowdStrike. According to Wedbush analyst Dan Ives, concerns over investor reactions and ongoing antitrust issues contributed to the deal’s collapse. Google has been under intense scrutiny from antitrust regulators and recently concluded a major trial initiated by the Department of Justice.
Ives pointed out that the cancellation of this deal would have wider implications across the tech industry. He anticipates that Google will continue to invest in expanding its cybersecurity capabilities despite the setback with Wiz, a trend he predicts will also be followed by Microsoft.
Ives noted that a consolidation in the cybersecurity sector is overdue and expects Microsoft to take steps to enhance its cybersecurity offerings within the next 12 to 18 months. This comes after Microsoft faced criticism due to a significant global IT outage caused by a problematic update to cybersecurity software provided by CrowdStrike. This incident affected Microsoft’s systems worldwide, leading to issues such as the infamous “blue screens of death” and disrupting various sectors including businesses, air travel, and government operations.
While Ives acknowledged that CrowdStrike continues to set the standard in cybersecurity, the recent outage suggests that Microsoft should reinforce its cybersecurity division, and the failed Google-Wiz deal creates further opportunities for such developments.