Wiz’s decision to reject Google’s acquisition offer could significantly impact Microsoft, according to analysts.
Google had aimed to acquire Israeli cybersecurity startup Wiz for $23 billion, but Wiz’s CEO Assaf Rappaport announced on Tuesday that the company will not proceed with the deal. Rappaport indicated that turning down such a substantial offer was a challenging choice, but one made in pursuit of Wiz’s long-term goal of achieving $1 billion in annual revenue and preparing for an initial public offering.
This acquisition would have enhanced Google’s cybersecurity capabilities, particularly in the wake of a recent major outage linked to CrowdStrike, a leading cybersecurity firm. Wedbush analyst Dan Ives noted that concerns from investors and ongoing antitrust issues led to the deal’s collapse. Google has faced significant scrutiny in recent years regarding antitrust matters, especially after concluding a trial related to investigations by the Department of Justice.
Ives commented that the failure of the Wiz acquisition would create ripple effects throughout the tech sector. He anticipates that Google will continue to strengthen its cybersecurity initiatives despite the deal’s cancellation, and he expects Microsoft, too, to explore ways to enhance its cybersecurity platform within the next year to 18 months.
The recent widespread IT outage attributed to a problematic update in CrowdStrike’s software has put Microsoft in a difficult spotlight. The incident caused disruptions globally, affecting various sectors, including businesses and government operations. While acknowledging CrowdStrike’s reputation for excellence in cybersecurity, Ives believes that this outage underscores the need for Microsoft to bolster its cybersecurity measures, a path that may be further encouraged by the failed Wiz deal.