Wiz’s decision to decline Google’s acquisition offer could have significant consequences for Microsoft, an analyst suggests. Google had aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but on Tuesday, Wiz CEO Assaf Rappaport publicly announced the rejection of the offer. Rappaport stated that turning down the deal was a “tough” choice, made in pursuit of Wiz’s ambition to achieve $1 billion in annual revenue and eventually go public.
Had the acquisition gone through, it would have strengthened Google’s position in the cybersecurity sector, particularly in light of a recent major outage impact linked to CrowdStrike. Dan Ives, an analyst at Wedbush, noted in a research note that concerns over investor sentiment and antitrust challenges contributed to the deal’s failure. Google has faced increased scrutiny from antitrust regulators and recently concluded a trial concerning these issues.
Ives emphasized that the failure of this acquisition will likely lead to broader implications across the tech industry. He anticipated that Google would continue to focus on expanding its cybersecurity capabilities despite losing the Wiz deal, a path Microsoft is also expected to explore.
Ives pointed out that consolidation within the cybersecurity sector is necessary and predicted that Microsoft would seek to enhance its cybersecurity platform in the coming year to 18 months. Microsoft came under scrutiny recently due to a widespread IT disruption caused by a flawed update to CrowdStrike’s cybersecurity software, which affected users globally, leading to significant operational disruptions.
Although Ives maintains that CrowdStrike remains the top choice in cybersecurity, the recent outage suggests that Microsoft could benefit from strengthening its cybersecurity offerings, a notion further encouraged by Google’s failed acquisition attempt.