Wiz’s decision to walk away from Google’s acquisition offer could have significant consequences for Microsoft, according to analysts. Google had aimed to purchase the Israeli cybersecurity startup Wiz for $23 billion, but the offer was declined by Wiz’s CEO Assaf Rappaport, who expressed that he wanted to focus on growing the company towards an annual revenue target of $1 billion and a potential IPO.
This acquisition would have enhanced Google’s cybersecurity sector just after a major incident involving a service disruption from CrowdStrike, which sent shockwaves through the industry. Analyst Dan Ives from Wedbush pointed out that investor skepticism and antitrust challenges played crucial roles in the cancellation of the deal. Google has faced heightened antitrust scrutiny and recently concluded a trial related to ongoing investigations by the Department of Justice.
Ives noted that the failed acquisition would have wider ramifications across the technology sector, suggesting that Google will likely continue to strengthen its cybersecurity capabilities despite the setback with Wiz. He also indicated that Microsoft might seize this opportunity to enhance its cybersecurity platform in the near future, as consolidation within this sector seems necessary.
Microsoft had recently faced criticism following a global IT outage prompted by a problematic update in its cybersecurity software provided by CrowdStrike. This incident, which led to significant disruptions for various businesses and government services, spotlighted the need for Microsoft to improve its cybersecurity offerings. Although Ives maintains that CrowdStrike remains a leading cybersecurity provider, the complications surrounding the outage may encourage Microsoft to further develop its cybersecurity operations, especially in light of Google’s unsuccessful acquisition attempt.