Wiz’s decision to decline Google’s acquisition offer could have significant consequences for Microsoft, according to analysts.
Google had proposed to acquire the Israeli cybersecurity firm Wiz for $23 billion, which would have marked the company’s largest acquisition to date. However, on Tuesday, Wiz CEO Assaf Rappaport announced that the company would not proceed with the deal. Rappaport explained that the difficult decision was made in order to focus on developing Wiz into a billion-dollar revenue business and to prepare for a potential initial public offering (IPO).
This acquisition would have enhanced Google’s cybersecurity capabilities at a time when the industry is particularly sensitive, following a major outage linked to CrowdStrike at the end of last week. In a note to investors, Wedbush analyst Dan Ives indicated that the breakdown of the deal was influenced by investor concerns and ongoing antitrust issues surrounding Google, which has been under intense scrutiny and recently concluded a trial related to major antitrust cases brought by the Department of Justice.
Ives noted that the failed acquisition could lead to broader impacts across the tech sector, suggesting that Google may continue to aggressively expand its cybersecurity initiatives despite the loss of the Wiz deal. He also pointed out that Microsoft, as a competitor, is likely to pursue similar strategies to enhance its own cybersecurity offerings in the next 12 to 18 months.
The spotlight was recently on Microsoft for less favorable reasons, as a widespread IT outage caused by a flawed update to CrowdStrike’s cybersecurity software created significant disruptions globally. Users of Microsoft’s Windows systems reported encountering critical error screens, and the outage affected businesses, travel, and government operations.
Although Ives still considers CrowdStrike the industry leader in cybersecurity, the recent incident has highlighted the importance of strengthening cybersecurity defenses, opening further opportunities for Microsoft in this area.