Wiz’s decision to decline Google’s acquisition offer could significantly impact Microsoft, according to analysts. Google had aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that they would not proceed with the deal. Rappaport cited a desire to focus on growing Wiz towards an annual revenue of $1 billion and preparing for an initial public offering as reasons for the rejection.
This acquisition would have strengthened Google’s cybersecurity capabilities, especially in light of a recent major outage caused by CrowdStrike, a leading cybersecurity provider. Wedbush analyst Dan Ives noted that concerns among investors and ongoing antitrust scrutiny contributed to the collapse of the deal. Google has faced substantial antitrust challenges in recent years and recently concluded a trial related to one of two significant Department of Justice cases.
Ives highlighted that the failure of this acquisition could have broader consequences for the tech sector, indicating that Google will likely continue to enhance its cybersecurity efforts despite the setback. He also suggested that Microsoft may pursue similar strategies to strengthen its cybersecurity platform in the next year to eighteen months.
The recent CrowdStrike incident, which affected Microsoft users globally and resulted in significant disruptions, underscored the vulnerabilities within even leading cybersecurity systems. Although Ives acknowledged CrowdStrike as a benchmark for cybersecurity standards, the recent outage signifies that there is room for improvement in Microsoft’s cybersecurity capabilities, especially now that the opportunity for further growth exists following Google’s unsuccessful attempt to acquire Wiz.