Wiz’s decision to withdraw from a deal with Google could significantly affect Microsoft, according to analysts.
Initially, Google aimed to acquire the Israeli cybersecurity startup Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company has chosen to reject the offer. Rappaport described the choice as a difficult one, emphasizing Wiz’s commitment to growing its revenue to $1 billion annually and pursuing an initial public offering (IPO) instead.
This acquisition would have strengthened Google’s position in the cybersecurity sector, particularly in light of a major outage last week caused by CrowdStrike, a key player in the industry. Following the news of the deal’s collapse, Wedbush analyst Dan Ives indicated that investor concerns and antitrust issues played a role in its failure. Google has faced heightened scrutiny regarding antitrust practices and recently concluded a trial related to one of two significant cases initiated by the Department of Justice.
Ives noted that the fallout from this deal would have broader implications across the tech industry. He suggested that, despite the setback with Wiz, Google is likely to continue focusing on expanding its cybersecurity capabilities, a trend that Microsoft may follow as well.
Ives pointed out that consolidation within the cybersecurity sector is overdue, and there is a possibility that Microsoft will seek to enhance its own cybersecurity offerings in the next 12 to 18 months. The company faced criticism after a global IT outage linked to a faulty update in CrowdStrike’s cybersecurity software caused disruptions worldwide. Microsoft users reported experiencing significant issues, which highlighted the need for improved cybersecurity measures.
While Ives maintains that CrowdStrike is still considered a leader in cybersecurity, the recent outage serves as a clear indicator that Microsoft might benefit from strengthening its cybersecurity platform, especially following the failed Google-Wiz deal.