Wiz’s decision to withdraw from the proposed acquisition by Google could have significant consequences for Microsoft, according to analysts.
Google aimed to acquire Israeli cybersecurity startup Wiz for $23 billion, but the deal was rejected by Wiz on Tuesday. CEO Assaf Rappaport described the decision as difficult, emphasizing the company’s goal of reaching $1 billion in annual revenue and pursuing an initial public offering (IPO).
The acquisition would have enhanced Google’s cybersecurity capabilities, particularly following a major outage linked to CrowdStrike that impacted the cybersecurity sector recently. Analyst Dan Ives from Wedbush attributed the collapse of the deal to investor apprehensions and ongoing antitrust issues facing Google, which has been under scrutiny and recently concluded a trial related to two significant cases initiated by the Department of Justice.
In an email to investors, Ives stated that the fallout from this failed deal will resonate across the industry. He noted that Google will likely intensify its efforts to strengthen its cybersecurity position despite the loss of the Wiz opportunity, a trend expected to be mirrored by Microsoft.
Ives mentioned that there is a pressing need for consolidation within the cybersecurity sector and speculated that Microsoft might pursue similar strategies to enhance its cybersecurity offerings in the next 12 to 18 months. The recent global IT outage caused by a problematic update to CrowdStrike’s cybersecurity software highlighted vulnerabilities, putting Microsoft under scrutiny as users faced severe disruptions.
While Ives maintains that CrowdStrike remains a benchmark in cybersecurity, the recent outage signals a pressing need for Microsoft to improve its cybersecurity solutions, further fueled by the failed acquisition of Wiz.