Wiz’s decision to withdraw from Google’s proposed acquisition could significantly affect Microsoft, according to analysts.
Google had sought to acquire Israeli cybersecurity startup Wiz for $23 billion, but Wiz’s CEO Assaf Rappaport announced on Tuesday that the company would not proceed with the deal. Rappaport described the decision as “tough,” emphasizing Wiz’s ambitions to reach $1 billion in annual revenue and eventually go public.
The failed acquisition would have enhanced Google’s position in the cybersecurity field, especially following a substantial outage linked to CrowdStrike that impacted the industry last week. Wedbush analyst Dan Ives noted in his research that the breakdown of the deal resulted from investor apprehensions and ongoing antitrust concerns, which have intensified around Google in recent years, culminating in a recent trial over antitrust issues led by the Department of Justice.
Ives remarked that the collapse of the deal might have broader implications for the technology sector. He mentioned that Google is likely to intensify its efforts to strengthen its cybersecurity capabilities despite the setback. Microsoft is expected to follow suit.
Ives further predicted that there is a pressing need for consolidation within the cybersecurity domain, hinting that Microsoft might explore acquisitions to enhance its cybersecurity offerings in the upcoming year to year and a half.
The recent situation has put Microsoft under scrutiny after a widespread IT outage attributed to a problematic update from CrowdStrike, which impacted businesses and operations globally. Although Ives still regards CrowdStrike as a leader in the cybersecurity space, the incident highlights the necessity for Microsoft to improve its cybersecurity assets, as the failed Google-Wiz deal potentially paves the way for further actions in this area.