Wiz’s decision to withdraw from the Google acquisition may hold significant consequences for Microsoft, according to analysts.
The proposed acquisition, which would have marked Google’s largest-ever deal at $23 billion, has fallen apart after Wiz CEO Assaf Rappaport stated that the company had chosen to reject Google’s offer. Rappaport described the decision as “tough,” explaining that Wiz aims to focus on its growth towards achieving $1 billion in annual revenue and pursuing an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity division, particularly in light of a recent major outage caused by CrowdStrike, an industry player. Following the announcement, Wedbush analyst Dan Ives noted that concerns from investors and ongoing antitrust issues contributed to the deal’s collapse. Google has faced heightened scrutiny regarding antitrust matters and has recently concluded its trial related to one of two significant cases brought by the Department of Justice.
Ives indicated that the failure of the deal could have broad implications for the tech sector. He foresees that Google is likely to intensify its efforts in expanding its cybersecurity initiatives, a move that will also be mirrored by Microsoft.
The analyst emphasized that consolidation in the cybersecurity sector is overdue and predicted that Microsoft might pursue opportunities to enhance its cybersecurity platform in the coming 12 to 18 months.
Recently, Microsoft found itself in the spotlight due to a significant global IT outage linked to a problematic update to CrowdStrike’s cybersecurity software. This incident disrupted operations across various sectors, leading to reports of Microsoft users facing severe system issues. While Ives maintains that CrowdStrike remains a leader in cybersecurity, he suggests that the outage highlights a need for Microsoft to strengthen its own cybersecurity capabilities, further underscoring the opportunities created by the failed Google-Wiz deal.