Wiz’s decision to withdraw from the Google acquisition could have significant ramifications for Microsoft, according to analysts.
Google had aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but the company declined the offer on Tuesday. Wiz’s CEO, Assaf Rappaport, cited the intention to focus on building Wiz towards generating $1 billion in annual revenue and pursuing an initial public offering (IPO) as the reason for the difficult decision.
Had the acquisition proceeded, it would have strengthened Google’s position in the cybersecurity sector, particularly following a substantial cyber incident involving CrowdStrike, which had a notable outage last week. Analyst Dan Ives from Wedbush pointed out that investor apprehensions and antitrust challenges played a role in the deal’s collapse. Google has faced significant scrutiny regarding antitrust matters, recently concluding a trial related to a high-profile case from the Department of Justice.
Ives commented that the failure of this deal will undoubtedly create ripples throughout the industry. He indicated that Google will likely continue to enhance its cybersecurity initiatives despite losing the Wiz opportunity. Likewise, Microsoft is also expected to pursue similar strategies.
According to Ives, the cybersecurity sector is ripe for consolidation, and he anticipates Microsoft may look to strengthen its cybersecurity offerings within the next year to 18 months. The company recently faced scrutiny during a widespread IT outage linked to a problematic update from CrowdStrike, which disrupted services globally, affecting businesses and government functions.
While Ives maintains that CrowdStrike remains a leader in cybersecurity, the recent outage highlights the necessity for Microsoft to potentially enhance its cyber capabilities, further opening possibilities in light of Google’s unsuccessful acquisition.