Wiz’s decision to withdraw from the Google acquisition deal could have significant consequences for Microsoft, according to analysts.
The Israeli cybersecurity startup Wiz turned down an offer from Google worth $23 billion, with CEO Assaf Rappaport stating that he made the difficult choice to focus on driving Wiz towards $1 billion in annual revenue and an eventual IPO. This acquisition would have enhanced Google’s cybersecurity division, especially in light of a recent major outage linked to CrowdStrike, a key player in the industry.
Wedbush analyst Dan Ives noted that investor apprehensions and ongoing antitrust issues were pivotal in the failure of the deal. Google has faced extensive scrutiny regarding antitrust practices and recently concluded a trial related to one of its two significant cases with the Department of Justice.
Ives indicated that the collapse of the acquisition could lead to widespread effects across the tech sector. He suggests that Google is likely to intensify its efforts to grow its cybersecurity capabilities despite the setback. Similarly, he anticipates that Microsoft may seek to enhance its cybersecurity offerings in the next 12 to 18 months.
The timing of this development is notable as Microsoft faced backlash due to a global IT outage that disrupted numerous services and operations, caused by an erroneous update from CrowdStrike. Reports of system failures, often referred to as “blue screens of death,” were widespread among Microsoft users.
Despite Ives maintaining that CrowdStrike remains a leader in cybersecurity, the incident indicates a potential need for Microsoft to strengthen its cybersecurity infrastructure, a situation that may be further propelled by Google’s abandoned acquisition plans.