Wiz’s refusal to accept Google’s acquisition offer could significantly affect Microsoft, according to an analyst.
Google had proposed a $23 billion takeover of the Israeli cybersecurity firm Wiz, but the company declined the offer. Wiz’s CEO, Assaf Rappaport, stated that the decision to turn down such a substantial sum was difficult but necessary for the firm’s goal of generating $1 billion in annual revenue and pursuing an initial public offering (IPO).
The acquisition would have enhanced Google’s cybersecurity division, particularly after the recent disruption caused by CrowdStrike, a major player in the industry. Dan Ives, an analyst at Wedbush, mentioned in a note to investors that worries from investors and antitrust challenges contributed to the deal’s collapse. Google has faced rigorous antitrust investigations lately and has just concluded a trial related to one of the Department of Justice’s significant cases against it.
Ives noted that the failed transaction could have ripple effects throughout the tech sector. Despite this setback, he anticipates Google will continue expanding its cybersecurity capabilities. Microsoft is also expected to follow suit.
Ives commented that the cybersecurity sector is ripe for consolidation and suggested that Microsoft might consider enhancing its own cybersecurity offerings in the next year or so. Recently, Microsoft faced scrutiny after a global IT outage linked to a flawed update from CrowdStrike affected many users. This situation underlines the necessity for Microsoft to strengthen its cybersecurity framework, making the failure of Google’s acquisition even more pertinent.