Wiz’s decision to decline Google’s acquisition offer could significantly affect Microsoft and the broader tech sector.
Google was in discussions to acquire the Israeli cybersecurity firm Wiz for $23 billion, but Wiz’s CEO Assaf Rappaport recently announced the company’s decision to reject the offer, stating the goal of building Wiz towards $1 billion in annual revenue and preparing for an initial public offering (IPO).
Wedbush analyst Dan Ives noted that investor apprehensions and ongoing antitrust challenges were key reasons behind the deal’s collapse. Google has faced intense scrutiny over its business practices and has recently concluded a trial related to one of two major antitrust cases brought by the Department of Justice.
Ives predicted that the failed acquisition would have rippling effects throughout the technology sector. He suggested that Google would likely continue to invest in strengthening its cybersecurity capabilities, a trend that Microsoft may also embrace.
“In the cybersecurity sector, we believe consolidation is overdue, and Microsoft might look to enhance its cybersecurity platform in the next 12 to 18 months,” Ives stated.
The recent turmoil surrounding a global IT outage linked to a faulty update in CrowdStrike’s cybersecurity software has put Microsoft under the lens. Users across the globe reported disruptions due to technical failures, raising concerns about the reliability of cybersecurity measures that Microsoft utilizes to protect its systems.
Despite recognizing CrowdStrike as a leading player in cybersecurity, Ives suggested that the incident underscores the necessity for Microsoft to strengthen its own cybersecurity offerings, a gap that the recent developments surrounding Wiz may help fill.