Wiz’s decision to turn down Google’s acquisition offer could have significant repercussions for Microsoft and the tech industry at large.
Google was attempting to acquire the Israeli cybersecurity startup Wiz for $23 billion; however, Wiz CEO Assaf Rappaport announced on Tuesday that the company would not proceed with the deal. Rappaport characterized the choice as a challenging one, noting that Wiz aims to achieve $1 billion in annual revenue and pursue an initial public offering (IPO).
This acquisition would have enhanced Google’s cybersecurity efforts, especially following a recent substantial outage caused by CrowdStrike, a major player in the industry. Wedbush analyst Dan Ives speculated that the abandonment of the deal stemmed from investor concerns and ongoing antitrust scrutiny that Google is facing, particularly in light of recent legal challenges from the Department of Justice.
Ives predicted that the fallout from this deal not materializing would create ripple effects throughout the sector. He suggested that Google would likely intensify its efforts to expand its cybersecurity capabilities, a trend Microsoft is expected to follow as well.
According to Ives, consolidation within the cybersecurity industry is necessary, and he anticipates that Microsoft will seek to enhance its cybersecurity platform over the next year to 18 months. The firm’s visibility increased following a recent global IT outage linked to an update in collaboration with CrowdStrike, disrupting numerous business operations and services worldwide.
While Ives regards CrowdStrike as a leader in the cybersecurity field, the recent issues underscore the need for Microsoft to strengthen its cybersecurity initiatives, particularly as Google’s failed acquisition creates additional opportunities in the market.