Wiz’s decision to decline Google’s acquisition offer could have significant consequences for Microsoft, according to analysts.
Google’s proposal to acquire the Israeli cybersecurity startup Wiz for $23 billion has been rejected, as announced by Wiz CEO Assaf Rappaport, who described the choice as “tough.” Rappaport emphasized the company’s goal to reach $1 billion in annual revenue and pursue an initial public offering (IPO) instead.
The setback comes at a time when bolstering Google’s cybersecurity offerings was critical, particularly following a recent major outage linked to cybersecurity firm CrowdStrike. Analyst Dan Ives of Wedbush noted that investor worries and ongoing antitrust scrutiny contributed to the collapse of the potential deal. Google is still facing significant legal challenges regarding antitrust regulations.
Ives remarked that the failed acquisition could create ripple effects throughout the tech industry. He anticipates that Google will persist in expanding its cybersecurity initiatives, a trend he expects Microsoft to follow as well.
Ives suggested that consolidation within the cybersecurity market is necessary, predicting that Microsoft will explore options to enhance its cybersecurity platform in the near future.
Microsoft recently encountered negative attention due to a global IT outage caused by a flawed update to its cybersecurity software from CrowdStrike, impacting users worldwide and causing widespread disruptions. Although Ives acknowledges CrowdStrike’s reputation as a leading cybersecurity provider, the incident indicates a potential need for Microsoft to strengthen its cybersecurity capabilities, a void that Google’s unfulfilled acquisition of Wiz has only highlighted.