Wiz’s decision to reject Google’s acquisition offer could significantly impact Microsoft, according to analysts.
Google was in the process of acquiring Israeli cybersecurity firm Wiz for $23 billion, but the deal fell through on Tuesday. Wiz CEO Assaf Rappaport made the difficult choice to decline the offer to focus on driving Wiz towards achieving $1 billion in annual revenue and to prepare for an eventual IPO.
This acquisition would have strengthened Google’s cybersecurity division, particularly following a major outage last week caused by cybersecurity firm CrowdStrike. Analyst Dan Ives from Wedbush noted in his research that the collapse of this deal stems from investor concerns and ongoing antitrust issues that Google faces. Google has been under intense scrutiny and recently concluded its trial in one of two significant cases led by the Department of Justice.
Ives emphasized that the fallout from the unsuccessful merger would ripple across the tech industry. He believes that Google will continue to invest heavily in expanding its cybersecurity presence, a move that its competitor Microsoft is also likely to pursue.
Ives suggested that consolidation is overdue in the cybersecurity space and expects Microsoft to seek ways to enhance its own cybersecurity offerings within the next year to 18 months. Recently, Microsoft faced criticism following a widespread global IT outage linked to a faulty update of its cybersecurity software provided by CrowdStrike. Last week, many Microsoft users experienced significant disruptions, including the infamous “blue screens of death,” affecting businesses, flights, and government services.
While Ives still considers CrowdStrike to be a leader in cybersecurity, the recent outage signals a need for Microsoft to strengthen its cybersecurity strategies further, and the collapse of the Google-Wiz deal may provide an opportunity for that.