Wiz’s decision to decline Google’s acquisition offer could create significant repercussions for Microsoft, according to an analyst.
Google was in the process of acquiring Israeli cybersecurity startup Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company would not proceed with the deal. Rappaport described the choice as “tough” but aimed at allowing Wiz to continue its growth towards achieving $1 billion in annual revenue and eventually pursuing an IPO.
The acquisition would have enhanced Google’s cybersecurity capabilities in the wake of a major outage triggered by industry leader CrowdStrike last week. Wedbush analyst Dan Ives stated in a research note that investor worries and antitrust concerns contributed to the deal’s failure. Google has faced significant antitrust scrutiny recently and recently concluded a trial linked to one of the two major cases filed by the Department of Justice.
Ives suggested that the cancellation of the Wiz deal would lead to broader effects throughout the tech sector. He indicated that Google would likely persist in expanding its cybersecurity offerings, as would Microsoft, which might seize this opportunity to strengthen its own cybersecurity platform in the next 12 to 18 months.
Microsoft found itself under intense scrutiny after a global IT outage attributed to a problematic update from CrowdStrike, which disrupted the functionality of many of its services and affected various sectors, including businesses and government operations. While Ives still regards CrowdStrike as the benchmark for cybersecurity, the outage highlights a potential need for Microsoft to enhance its offerings, with the recent breakdown of the Google-Wiz deal further opening pathways for such developments.