Wiz’s refusal to proceed with the Google acquisition could create significant consequences for Microsoft, according to analysts.
In a surprising turn of events, Israeli cybersecurity startup Wiz has declined Google’s offer to acquire the company for $23 billion. CEO Assaf Rappaport cited the desire to focus on building Wiz toward generating $1 billion in annual revenue and pursuing an initial public offering (IPO) as reasons for the decision.
This withdrawal comes at a time when Google was eager to enhance its cybersecurity division, especially following a major outage caused by the cybersecurity firm CrowdStrike last week. Wedbush analyst Dan Ives noted that investor concerns and antitrust issues played critical roles in the collapse of the deal. Google has faced substantial antitrust scrutiny recently, culminating in a trial connected to one of two major cases brought by the Department of Justice.
Ives expressed that the failed acquisition could lead to broader implications across the tech sector. He anticipates that Google will continue to focus on expanding its cybersecurity offerings, a strategy likely mirrored by its competitor, Microsoft.
Ives further emphasized that consolidation within the cybersecurity sector is necessary, and he expects Microsoft to actively seek to enhance its cybersecurity platform in the next 12 to 18 months. The company faced criticism following widespread global IT disruptions linked to a faulty update from CrowdStrike, which uses its software to bolster cybersecurity on Windows operating systems. Users everywhere reported encountering significant disruptions, raising questions about the robustness of Microsoft’s cybersecurity strategies.
Although Ives maintains that CrowdStrike remains a leading figure in cybersecurity, the recent outages highlight that Microsoft may have room for improvement in its cybersecurity capabilities, making the failure of the Wiz deal particularly relevant for its future initiatives.