Wiz’s decision to decline Google’s acquisition offer could significantly affect Microsoft, according to analysts.
The search giant aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but Wiz’s CEO Assaf Rappaport announced on Tuesday that the company would not accept the deal. Rappaport explained that he faced a “tough” choice, prioritizing the goal of reaching $1 billion in annual revenue and pursuing an initial public offering over the substantial offer from Google.
This acquisition would have enhanced Google’s cybersecurity capabilities, especially following a notable outage affecting the cybersecurity sector, attributed to CrowdStrike. Wedbush analyst Dan Ives commented on the situation, noting that investor concerns and antitrust challenges contributed to the deal falling through. Google has been under considerable scrutiny regarding antitrust issues, recently concluding its trial in one of two major cases led by the Department of Justice.
Ives indicated that the failed acquisition would have lasting effects across the technology sector. He believes Google will likely continue its efforts to expand its cybersecurity presence, a move that could also prompt Microsoft to enhance its own cybersecurity initiatives in the coming months.
Microsoft recently faced criticism amid a widespread IT outage caused by a faulty update from CrowdStrike, which is utilized in its systems to thwart hacker activities. The incident led to significant disruptions, raising questions about the need for Microsoft to strengthen its cybersecurity measures further, especially in light of Google’s abandoned deal.