Wiz’s decision to walk away from a significant acquisition by Google could have considerable repercussions for the tech sector, particularly for Microsoft.
Initially, Google planned to purchase the Israeli cybersecurity firm Wiz for $23 billion, but the deal was rejected by Wiz’s CEO Assaf Rappaport, who stated that the choice to decline the offer was challenging. He emphasized his intention to focus on growing Wiz toward achieving an annual revenue of $1 billion and preparing for an initial public offering (IPO).
This acquisition would have strengthened Google’s position in the cybersecurity realm, especially following a major outage attributable to CrowdStrike, a key player in the industry, which recently disrupted various services. Analyst Dan Ives from Wedbush indicated that concerns regarding investor confidence and regulatory antitrust challenges contributed to the collapse of the deal. Google has faced significant scrutiny in relation to antitrust issues and recently concluded a trial concerning one of two significant cases filed by the Department of Justice.
Ives pointed out that the failed acquisition will likely have broader implications across the tech industry. He noted that Google will probably continue to reinforce its cybersecurity initiatives despite the setback with Wiz. Microsoft is also expected to respond by enhancing its cybersecurity offerings.
Ives suggested that consolidation in the cybersecurity field is overdue and predicted that Microsoft might pursue this path in the next 12 to 18 months to strengthen its cybersecurity platform. The company made headlines recently, albeit negatively, due to a substantial global IT outage linked to a faulty update from CrowdStrike, which intensified calls for Microsoft to bolster its cybersecurity division. While CrowdStrike remains highly regarded in cybersecurity circles, the recent incident indicates a pressing need for Microsoft to enhance its capabilities, and the failed deal with Wiz may further open up that opportunity.