Wiz’s decision to decline Google’s acquisition offer could have significant repercussions for Microsoft, according to analysts.
Google was poised to make its largest acquisition by purchasing Israeli cybersecurity startup Wiz for $23 billion. However, Wiz’s CEO, Assaf Rappaport, announced that the company opted to reject the deal to focus on its goal of achieving $1 billion in annual revenue and preparing for an initial public offering.
This move comes after the cybersecurity landscape faced turbulence due to a major outage linked to industry leader CrowdStrike last week. Following the news of Wiz’s decision, Wedbush analyst Dan Ives stated that investor anxiety and antitrust concerns were primary factors leading to the collapse of the deal. Google has been under significant antitrust scrutiny recently, having just concluded a trial related to two significant cases from the Department of Justice.
Ives noted in a message to investors that the failure of this deal could have broader implications for the tech industry. He suggested that Google would likely intensify its efforts to expand its cybersecurity capabilities despite the setback with Wiz. Microsoft, he added, may also seek to strengthen its own cybersecurity platform in the next 12 to 18 months, as consolidation in the cybersecurity sector seems overdue.
The recent CrowdStrike outage, which affected many of Microsoft’s users globally by causing system failures and disrupting various operations, has put added pressure on Microsoft to enhance its cybersecurity solutions. Despite Ives labeling CrowdStrike as the “gold standard” in the field, the incident indicates that improvements may be necessary for Microsoft in its cybersecurity strategies. The failed acquisition deal with Wiz may present a unique opportunity for Microsoft to advance its cybersecurity portfolio in response to these challenges.