Wiz’s decision to reject Google’s acquisition offer could significantly affect Microsoft, according to analysts.
Wiz, an Israeli cybersecurity startup, turned down Google’s proposed $23 billion deal, with CEO Assaf Rappaport stating that he made the difficult choice to focus on building the company’s annual revenue to $1 billion and eventually pursue an IPO.
This acquisition would have strengthened Google’s cybersecurity operations, especially after a significant outage at CrowdStrike, a prominent player in the industry, that occurred last week. Wedbush analyst Dan Ives indicated that investor concerns and ongoing antitrust challenges led to the deal’s collapse. Google has faced substantial antitrust scrutiny recently and recently concluded a trial related to one of two major cases initiated by the Department of Justice.
Ives noted in a communication to investors, “We believe there will be ripple impacts across the sector from this deal not happening.” He suggested that despite the failed acquisition, Google will likely continue to grow its cybersecurity capabilities, a strategy that will also be mirrored by Microsoft.
He added, “We believe consolidation is overdue in the cybersecurity sector, and we would expect Microsoft to potentially pursue this path to enhance its own cybersecurity platform in the next 12 to 18 months.”
Microsoft faced negative attention due to a global IT outage linked to a flawed update from CrowdStrike, impacting its cybersecurity software. Users reported issues, including frequent system crashes, disrupting business activities, travel, and government functions.
Although Ives maintains that CrowdStrike remains a leading figure in cybersecurity, the outage emphasizes the need for Microsoft to strengthen its cybersecurity offerings, an opportunity that the unsuccessful Google deal may further facilitate.