Wiz’s decision to reject Google’s acquisition offer could have significant repercussions for Microsoft and the tech industry as a whole.
Google was poised to acquire the Israeli cybersecurity firm Wiz for $23 billion, but the deal fell through when Wiz CEO Assaf Rappaport opted to turn down the substantial bid. Rappaport stated that he made this challenging choice to focus on growing Wiz towards an annual revenue of $1 billion and preparing for an initial public offering.
This acquisition would have significantly strengthened Google’s cybersecurity division, especially following a recent major outage triggered by the cybersecurity company, CrowdStrike, that affected the industry. Analyst Dan Ives from Wedbush noted that investor apprehensions and ongoing antitrust issues played a crucial role in the deal’s collapse. Google has faced increasing antitrust scrutiny in recent years and recently concluded a trial related to one of two significant cases brought forth by the Department of Justice.
Ives indicated in a communication to investors that the failure of this deal would have far-reaching consequences within the sector. He suggested that Google is likely to intensify its efforts to enhance its cybersecurity capabilities, a path Microsoft is also expected to follow.
Ives mentioned that the cybersecurity sector has been ripe for consolidation and predicted that Microsoft may seek to strengthen its own cybersecurity platform in the next 12 to 18 months.
Last week, Microsoft faced criticism amid a widespread global IT outage linked to a problematic update of cybersecurity software supplied by CrowdStrike. Users of Microsoft’s Windows systems experienced significant disruptions, including the infamous “blue screens of death,” which affected various operations, including businesses, flights, and government services.
While Ives continues to regard CrowdStrike as a leader in the cybersecurity field, the recent outage may underscore the urgent need for Microsoft to enhance its cybersecurity offerings, a potential opportunity opened further by the failed Wiz deal.