Wiz’s decision to decline Google’s acquisition offer could significantly affect Microsoft, according to analyst insights.
Google had proposed acquiring Israeli cybersecurity startup Wiz for $23 billion, but Wiz’s CEO Assaf Rappaport announced on Tuesday that they would not proceed with the offer. Rappaport explained that the choice was difficult but necessary for Wiz to focus on achieving $1 billion in annual revenue and preparations for an IPO.
This potential acquisition would have enhanced Google’s cybersecurity capabilities, especially following a major outage from CrowdStrike, another prominent player in the industry. Analyst Dan Ives from Wedbush noted that factors such as investor apprehension and antitrust concerns contributed to the deal’s collapse. Google has faced considerable scrutiny regarding antitrust issues, recently concluding a significant trial related to these concerns.
Ives emphasized that the failure of this deal is expected to have widespread repercussions throughout the tech sector. Despite the setback, he anticipates that Google will continue to invest in expanding its cybersecurity operations. He also predicts that Microsoft may take similar steps to strengthen its cybersecurity platform in the upcoming 12 to 18 months.
Microsoft has recently faced scrutiny due to a global IT outage linked to an update in its cybersecurity technology provided by CrowdStrike. Users worldwide experienced significant disruptions, highlighting potential vulnerabilities in Microsoft’s approach. While Ives continues to regard CrowdStrike as the leading name in cybersecurity, the recent incident suggests that Microsoft should consider enhancing its cybersecurity offerings, especially in light of Google’s failed acquisition of Wiz.