Wiz’s decision to decline Google’s acquisition offer could significantly impact Microsoft, according to an analyst.
Google had aimed to acquire the Israeli cybersecurity company Wiz for $23 billion, but the offer was rejected by Wiz on Tuesday. Assaf Rappaport, Wiz’s CEO, stated that he made the challenging choice to turn down the substantial bid to focus on growing Wiz toward a $1 billion revenue goal and preparing for an IPO.
This acquisition would have strengthened Google’s cybersecurity efforts, particularly following a major disruption last week caused by CrowdStrike, a key player in the industry. Dan Ives from Wedbush noted that investor apprehensions and ongoing antitrust issues led to the deal’s collapse. Google has faced increasing antitrust scrutiny recently, culminating in a significant trial from the Department of Justice.
Ives expressed that the failed acquisition would have significant ripple effects throughout the sector. He anticipates that Google will continue to invest in expanding its cybersecurity capabilities, a strategy that Microsoft is likely to adopt as well.
Ives emphasized that consolidation within the cybersecurity sector is overdue, predicting that Microsoft may pursue strengthening its cybersecurity platform in the next year or so.
This comes after a global IT outage caused by a faulty update in CrowdStrike’s software, which affected Microsoft users and resulted in widespread disruptions across businesses, flights, and government operations. Despite acknowledging CrowdStrike as the leading name in cybersecurity, Ives indicated that the incident suggests Microsoft should enhance its own cybersecurity offerings, with the collapse of the Wiz deal providing an opportunity to do so.