Wiz’s decision to reject Google’s acquisition offer could have significant ramifications for Microsoft, according to analysts.
Google had aimed to acquire Israeli cybersecurity firm Wiz for $23 billion, but the company turned down the offer on Tuesday. Wiz’s CEO, Assaf Rappaport, explained that the choice was a difficult one but necessary for the startup to focus on achieving $1 billion in annual revenue and preparing for an IPO.
This acquisition would have enhanced Google’s cybersecurity portfolio, especially following a major outage linked to CrowdStrike, a key player in the cybersecurity field, which occurred last week. Wedbush analyst Dan Ives pointed out that concerns over investor sentiment and ongoing antitrust challenges contributed to the deal’s collapse. Google is facing notable antitrust scrutiny and has recently concluded a trial related to one of two major cases brought against it by the Department of Justice.
Ives indicated that the failure of this acquisition could create ripple effects throughout the tech industry. He believes Google will continue to invest in expanding its cybersecurity initiatives, a trend likely mirrored by Microsoft.
Ives also mentioned that there has been a long-overdue need for consolidation within the cybersecurity sector, suggesting that Microsoft may look to enhance its cybersecurity platform in the next 12 to 18 months.
Microsoft gained negative attention when a global IT outage occurred due to a faulty update in its cybersecurity software from CrowdStrike. Users reported encountering the “blue screens of death,” leading to widespread disruptions in business, travel, and government services.
Despite acknowledging CrowdStrike’s premier status in cybersecurity, Ives points out that the recent outage may signal a pressing need for Microsoft to strengthen its cybersecurity offerings, especially in light of Google’s unsuccessful pursuit of Wiz.