Wiz’s decision to decline Google’s acquisition offer could significantly impact Microsoft, according to analysts.
Google aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company would not proceed with the deal. Rappaport described the choice as “tough,” motivated by Wiz’s goal to grow towards $1 billion in annual revenue and pursue an initial public offering.
This acquisition would have strengthened Google’s cybersecurity division, especially following a major outage caused by CrowdStrike, a leading entity in the cybersecurity sector, just days before. Analyst Dan Ives from Wedbush noted that concerns from investors and ongoing antitrust challenges contributed to the breakdown of the acquisition negotiation. Google has faced extensive antitrust scrutiny in recent years and recently concluded a trial related to two significant cases from the Department of Justice.
Ives indicated that the failure of this deal could have “ripple impacts” throughout the technology sector. He suggested that Google will likely continue to expand its cybersecurity capabilities, as will its competitor Microsoft.
He commented, “Consolidation is overdue in the cybersecurity sector, and we expect Microsoft to possibly pursue this path to enhance its cybersecurity platform over the next year to 18 months.”
Recently, Microsoft faced criticism due to a global IT outage linked to a problematic update of its cybersecurity software by CrowdStrike. This incident revealed vulnerabilities, as users reported encountering significant system failures. Although Ives maintains that CrowdStrike is a top-tier cybersecurity firm, this outage highlights the necessity for Microsoft to strengthen its cybersecurity offerings, and the termination of Google’s deal with Wiz may further propel that necessity.