Wiz’s decision to turn down Google’s acquisition offer could have significant consequences for Microsoft, according to industry analysts.
Google had proposed purchasing Israeli cybersecurity startup Wiz for $23 billion, but the company opted to reject this lucrative offer to focus on achieving its goal of reaching $1 billion in annual revenue and preparing for an IPO, as stated by Wiz CEO Assaf Rappaport. This deal would have strengthened Google’s cybersecurity capabilities, especially following a major outage last week linked to CrowdStrike, a significant player in the industry.
Wedbush analyst Dan Ives noted that the breakdown of this potential acquisition could lead to wider repercussions in the tech sector. He pointed out that concerns from investors and ongoing antitrust issues contributed to Wiz’s decision to decline the offer. Despite this setback, Ives believes that Google will continue to pursue expansion within its cybersecurity division.
Similarly, Microsoft is also expected to intensify its own cybersecurity efforts in light of this development. Ives mentioned that the cybersecurity sector is ripe for consolidation and that Microsoft may consider enhancing its cybersecurity portfolio in the next year to 18 months.
The situation became even more pressing for Microsoft after it faced criticism for a global IT outage caused by a malfunctioning update in CrowdStrike’s software. This incident resulted in widespread disruptions, affecting businesses and government operations around the world. Even though Ives maintains that CrowdStrike is a leading name in cybersecurity, the recent outage signals a need for Microsoft to strengthen its cybersecurity measures, particularly as the opportunity for growth arises from Google’s failed deal.