Wiz’s decision to decline Google’s acquisition offer could have significant ramifications for Microsoft and the broader tech industry.
Google was pursuing Israeli cybersecurity startup Wiz for $23 billion, but the deal fell through after Wiz’s CEO Assaf Rappaport opted to reject the offer, intending to focus on increasing the company’s revenue to $1 billion and preparing for an initial public offering. This decision comes on the heels of a major outage caused by CrowdStrike, a leading cybersecurity firm, which highlighted vulnerabilities in the sector.
Wedbush analyst Dan Ives noted that concerns among investors and ongoing antitrust investigations contributed to the deal’s breakdown. Google has faced extensive scrutiny from regulators, recently concluding a major trial with the Department of Justice.
Ives commented that the cancellation of this deal could lead to broader consequences within the cybersecurity field. Despite this setback, he predicted that Google would continue to expand its cybersecurity capabilities, a trend that could be echoed by Microsoft.
Ives suggested that there is a pressing need for consolidation in the cybersecurity market, and he expects Microsoft to pursue opportunities to enhance its cybersecurity offerings in the next year or so.
Microsoft recently faced scrutiny when a global IT outage affected many due to a problematic update from CrowdStrike, which services Microsoft’s cybersecurity measures. This incident evoked widespread user frustration and disruption across various sectors, reinforcing the idea that Microsoft may want to strengthen its cybersecurity infrastructure. The collapse of the Wiz acquisition may further encourage this direction for the tech giant.