Wiz’s decision to withdraw from a potential acquisition by Google could significantly affect Microsoft, according to analysts.
Google was poised to acquire the Israeli cybersecurity firm Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company would not be taking the deal. Rappaport stated that turning down the offer was a difficult choice, aimed at focusing on growing Wiz towards an annual revenue of $1 billion and preparing for an initial public offering.
This acquisition would have enhanced Google’s cybersecurity capabilities, especially in light of a recent substantial outage linked to CrowdStrike, a major player in the industry. Analyst Dan Ives from Wedbush noted that investor apprehensions and ongoing antitrust issues surrounding Google contributed to the collapse of the deal. Google has faced considerable antitrust scrutiny in recent years and recently concluded a trial related to one of two significant cases initiated by the Department of Justice.
Ives indicated that the failure of this deal is likely to create ripple effects throughout the sector. He anticipates that Google will continue to enhance its cybersecurity presence despite the setback with Wiz and suggests that Microsoft may also seek to strengthen its own cybersecurity solutions in the next year or so.
This situation comes on the heels of Microsoft being scrutinized after a widespread global IT outage attributed to a faulty CrowdStrike software update. Users reported experiencing system failures, commonly referred to as the “blue screen of death,” which affected multiple sectors, including businesses, airlines, and government operations.
While Ives maintains that CrowdStrike remains a leading name in cybersecurity, the recent outage underscores the need for Microsoft to augment its cybersecurity capabilities, and with the collapse of Google’s deal, the opportunity for expansion increases.