Wiz’s decision to decline Google’s acquisition offer could significantly impact Microsoft and the broader tech industry.
Google had aimed to acquire Israeli cybersecurity firm Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that they would not proceed with the deal. Rappaport described the decision as challenging, as the company focuses on its goal of reaching $1 billion in annual revenue and preparing for an initial public offering.
This acquisition would have enhanced Google’s cybersecurity capabilities, especially following a major outage caused by cybersecurity company CrowdStrike last week. According to Wedbush analyst Dan Ives, concerns about investor confidence and antitrust issues played a role in the deal’s collapse. Google has faced intense scrutiny over antitrust matters and recently concluded a trial linked to one of two key cases from the Department of Justice.
Ives noted in a message to investors that the failure of the deal could lead to significant repercussions in the sector. He anticipates that Google will continue to pursue expansion in its cybersecurity initiatives despite the setback. Similarly, Microsoft is expected to enhance its own cybersecurity strategy.
Ives remarked that consolidation in the cybersecurity sector is overdue and predicted that Microsoft may seek to strengthen its cybersecurity offerings in the next 12 to 18 months. The company faced negative attention recently due to a significant global IT outage triggered by a faulty update in CrowdStrike’s cybersecurity software, which impacted Microsoft’s systems. Reports of widespread problems arose, including the infamous “blue screen of death,” affecting businesses and public services worldwide.
While Ives still considers CrowdStrike a leader in cybersecurity, the recent outage suggests that Microsoft may need to improve its cybersecurity infrastructure, and the dissolution of the Wiz deal could facilitate that process.