Wiz’s decision to decline Google’s acquisition offer could have significant consequences for Microsoft, according to analysts.
The tech giant had aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but Wiz’s CEO Assaf Rappaport announced on Tuesday that the company would be moving forward independently to focus on achieving an annual revenue of $1 billion and preparing for an initial public offering.
This rejection comes at a time when Google sought to enhance its cybersecurity capabilities, following a major disruption in the digital landscape linked to cybersecurity firm CrowdStrike. Dan Ives, an analyst at Wedbush, noted in a research update that investor apprehensions and ongoing antitrust issues contributed to the breakdown of the potential deal. Google has faced increasing scrutiny from regulators, culminating in a recent trial related to antitrust cases brought by the Department of Justice.
Ives mentioned that the failure of this acquisition would reverberate throughout the tech industry. He expects Google to intensify its efforts to grow its cybersecurity operations, which may also motivate Microsoft to pursue strengthening its own cybersecurity platform in the next one to one-and-a-half years.
Microsoft recently faced criticism due to widespread issues stemming from a problematic update in its cybersecurity software, provided by CrowdStrike. This incident led to numerous reports of system failures, known as “blue screens of death,” affecting businesses, flights, and government operations globally. While CrowdStrike continues to be regarded as a leader in the cybersecurity field, this outage may prompt Microsoft to enhance its cybersecurity strategies further, especially in light of Google’s missed opportunity with Wiz.