Wiz’s decision to turn down Google’s acquisition offer could significantly affect Microsoft and the tech sector as a whole.
Google was poised to acquire Israeli cybersecurity company Wiz for $23 billion, but the deal fell through when Wiz CEO Assaf Rappaport announced the company would focus on achieving $1 billion in annual revenue and pursuing an initial public offering instead. He described the choice as a difficult one.
The failed acquisition comes on the heels of a major incident involving CrowdStrike, a prominent player in the cybersecurity field, which experienced a significant outage last week. This raised further concerns in the cybersecurity industry. Wedbush analyst Dan Ives indicated that antitrust issues and investor apprehensions were key factors in the deal’s collapse, particularly as Google faces ongoing regulatory scrutiny from the Department of Justice.
Ives noted in a message to investors that the failure of the Wiz deal would likely lead to ramifications across the technology sector. He anticipates that Google will persist in enhancing its cybersecurity initiatives, a strategy that Microsoft is also expected to pursue. Ives suggested that consolidation within the cybersecurity sector is necessary and predicted that Microsoft may seek to strengthen its cybersecurity offerings over the next year to 18 months.
Microsoft found itself under scrutiny following the CrowdStrike outage, which affected its Windows operating system. Users around the globe reported experiencing system failures, which disrupted various services, including businesses, air travel, and government functions. Despite Ives still regarding CrowdStrike as a benchmark in cybersecurity, the incident has highlighted the need for Microsoft to enhance its cybersecurity capabilities. With the Wiz acquisition now off the table, Microsoft has a clearer opportunity to expand its cybersecurity measures.