Wiz’s decision to decline Google’s acquisition offer could have significant consequences for Microsoft, according to analysts. Google was pursuing Wiz, an Israeli cybersecurity startup, for a whopping $23 billion, but the startup’s CEO, Assaf Rappaport, announced on Tuesday that they opted to reject the offer. Rappaport stated that the difficult choice was made to focus on growing Wiz toward achieving $1 billion in annual revenue and pursuing an initial public offering (IPO).
This acquisition would have bolstered Google’s cybersecurity division, especially following a major outage that impacted the cyber industry last week, caused by CrowdStrike. In a note to investors, Wedbush analyst Dan Ives highlighted that investor anxiety and ongoing antitrust concerns led to the collapse of the deal. Google has faced heightened antitrust scrutiny recently and concluded a trial related to two significant cases from the Department of Justice.
Ives expressed that the failure of the deal would create ripple effects throughout the tech sector. He noted that, despite the setback, Google is likely to intensify efforts to expand its presence in the cybersecurity market, a sentiment that could also apply to Microsoft.
Ives indicated that consolidation in the cybersecurity sector is overdue and predicted that Microsoft would explore opportunities to enhance its own cybersecurity platform within the next 12 to 18 months. The company faced criticism after a recent global IT outage linked to CrowdStrike’s cybersecurity software, which disrupted numerous businesses, flights, and government services. While Ives maintains that CrowdStrike remains a leading player in cybersecurity, the incident suggests that Microsoft would benefit from strengthening its cybersecurity capabilities, a prospect made more viable by Google’s unsuccessful acquisition attempt.