Wiz’s decision to decline Google’s acquisition offer could have significant effects on Microsoft, according to an analyst.
Google aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but the deal was rejected on Tuesday. Wiz CEO Assaf Rappaport stated that turning down the substantial offer was a tough choice made to focus on reaching $1 billion in annual revenue and pursuing an initial public offering (IPO).
This acquisition would have strengthened Google’s position in the cybersecurity sector, especially following a major outage caused by CrowdStrike, a key player in the industry, last week. Wedbush analyst Dan Ives noted in a report that the deal’s collapse was influenced by investor apprehensions and ongoing antitrust concerns surrounding Google. The company has faced heightened scrutiny and recently concluded a trial related to antitrust cases initiated by the Department of Justice.
Ives suggested that the failure of the deal will lead to wider repercussions across the tech industry. He anticipates that Google will intensify its efforts to expand its cybersecurity capabilities, a path Microsoft is also expected to pursue.
Ives stated, “Consolidation is overdue in the cybersecurity sector, and we would expect Microsoft to potentially explore options to enhance its cybersecurity platform in the next 12 to 18 months.”
Microsoft recently garnered negative attention due to a significant global IT outage attributed to a faulty CrowdStrike update. Users reported severe issues, including the infamous “blue screen of death,” disrupting operations across businesses and governments worldwide.
While Ives acknowledges CrowdStrike as still being a leader in cybersecurity, the recent outage underscores the need for Microsoft to strengthen its security measures further, a need that the collapse of the Wiz deal only amplifies.