Wiz’s decision to back out of the Google deal could have significant implications for the tech industry, particularly for Microsoft, according to analysts.
What would have been Google’s largest acquisition fell through when Israeli cybersecurity startup Wiz rejected the tech giant’s $23 billion offer. Wiz CEO Assaf Rappaport opted to decline the substantial sum to focus on building Wiz toward achieving $1 billion annually in revenue and preparing for an IPO.
This decision comes at a critical time for Google’s cybersecurity ambitions, especially following a significant outage caused by cybersecurity firm CrowdStrike last week. Wedbush analyst Dan Ives noted that investor concerns and antitrust issues were likely factors in the deal’s collapse. Google has faced intense antitrust scrutiny recently and just concluded its trial in one of two major cases from the Department of Justice.
Ives indicated that Google’s failure to acquire Wiz could have broader impacts on the cybersecurity sector. Despite the setback, he expects Google to continue expanding its cybersecurity capabilities. Ives also anticipates that Microsoft might pursue similar moves.
“We believe consolidation is overdue in the cybersecurity sector and Microsoft may look to strengthen its own cybersecurity platform over the coming 12 to 18 months,” Ives wrote.
Microsoft recently faced scrutiny due to a global IT outage caused by an update to its cybersecurity software provided by CrowdStrike. This incident highlighted vulnerabilities, with many users experiencing system disruptions worldwide. Despite the outage, Ives still views CrowdStrike as the “gold standard” in cybersecurity but suggests that Microsoft could benefit from enhancing its cybersecurity offerings, especially given Google’s failed acquisition attempts.