Wiz’s decision to reject Google’s acquisition offer could have significant ramifications for Microsoft and the tech sector as a whole.
Google had aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but the deal fell through as Wiz CEO Assaf Rappaport opted to focus on growing the company towards its goal of generating $1 billion in annual revenue and pursuing an initial public offering. This decision comes at a time when Google is keen to strengthen its cybersecurity capabilities, especially after a major outage attributed to industry leader CrowdStrike impacted many organizations last week.
Wedbush analyst Dan Ives pointed out that factors such as investor apprehensions and ongoing antitrust challenges led to the demise of the acquisition. Google has faced intense scrutiny from regulators and recently concluded its trial in a significant Department of Justice case.
Ives noted that the failure of the Wiz deal will likely have broader impacts throughout the cybersecurity industry. Despite this setback, he believes that Google will intensify efforts to enhance its cybersecurity offerings. He predicts that Microsoft will similarly seek to expand its cybersecurity platform within the next 12 to 18 months.
This comes amid criticism faced by Microsoft following a widespread IT outage linked to a flawed update of its cybersecurity software provided by CrowdStrike. Users reported issues, including the notorious “blue screens of death,” which disrupted various sectors, including business operations and government services.
While Ives maintains that CrowdStrike remains a leader in cybersecurity, he suggests that the recent incidents signal a need for Microsoft to strengthen its cybersecurity capabilities, especially in light of the recent failed acquisition by Google.