Wiz’s decision to back out of a deal with Google could have significant consequences for Microsoft, according to an analyst.
Google had proposed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but Wiz’s CEO Assaf Rappaport announced on Tuesday that the company would not move forward with the offer. Rappaport described the choice as “tough,” emphasizing the company’s goal of achieving $1 billion in annual revenue and pursuing an initial public offering (IPO) instead.
This acquisition would have enhanced Google’s cybersecurity capabilities, especially following a recent incident where a major outage from CrowdStrike affected the industry. Analyst Dan Ives from Wedbush noted in a research note that concerns among investors and ongoing antitrust challenges contributed to the deal’s collapse. Google is facing heightened antitrust scrutiny and recently concluded a significant trial linked to the Department of Justice.
Ives indicated that the failure of this acquisition would have ripple effects across the tech sector. He anticipates that Google will continue to focus on expanding its cybersecurity operations despite the setback with Wiz. Similarly, he expects Microsoft to consider strengthening its cybersecurity offerings over the next year to 18 months.
The recent CrowdStrike outage had a negative impact on Microsoft, as its cybersecurity software relies on CrowdStrike for protection against potential attacks. Users globally reported experiencing significant disruptions, including the infamous “blue screen of death.” While Ives still regards CrowdStrike as a leading player in the cybersecurity field, the incident suggests an opportunity for Microsoft to enhance its cybersecurity platform, especially given the current landscape following Google’s failed acquisition.