Wiz’s decision to turn down Google’s acquisition offer could significantly affect Microsoft’s position in the tech sector, according to analysts.
Google had aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but Wiz’s CEO Assaf Rappaport announced on Tuesday that the company would reject the proposal. Rappaport stated that the decision was difficult but necessary to focus on achieving $1 billion in annual revenue and planning for an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity division, especially in light of recent troubles faced by the industry following a major outage linked to CrowdStrike. Analyst Dan Ives from Wedbush attributed the collapse of the deal to investor apprehensions and ongoing antitrust challenges faced by Google. The company is under significant regulatory scrutiny and recently concluded a trial related to one of two major cases brought by the Department of Justice.
Ives expressed concern that the failed deal would have broader implications across the tech sector. He suggested that, despite the setback with Wiz, Google will likely continue to expand its cybersecurity initiatives, a trend that could also influence Microsoft’s strategies.
Ives noted that consolidation within the cybersecurity field is needed and predicted that Microsoft might pursue similar avenues to enhance its cybersecurity offerings over the next 12 to 18 months. Microsoft recently encountered negative attention due to a global IT outage stemming from an issue with CrowdStrike’s software, which is crucial in protecting its Windows operating systems. This incident, which caused widespread disruptions across various sectors, further highlights the necessity for Microsoft to strengthen its cybersecurity capabilities.