Wiz’s decision to reject Google’s acquisition bid could significantly affect Microsoft, according to analysts.
Google had aimed to purchase Israeli cybersecurity company Wiz for $23 billion, but Wiz’s CEO Assaf Rappaport announced the rejection of this proposal. Rappaport explained that the tough choice was made to focus on growing Wiz towards achieving $1 billion in annual revenue and aiming for an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity offerings following a recent major disruption in the industry caused by CrowdStrike, a notable player in the field. Wedbush analyst Dan Ives indicated that investor apprehensions and ongoing antitrust issues contributed to the deal’s failure. Google has faced considerable scrutiny from regulators and recently concluded a significant trial related to antitrust cases initiated by the Department of Justice.
Ives projected that the fallout from this unsuccessful deal would create ripples throughout the tech sector, suggesting Google will likely continue to enhance its cybersecurity initiatives despite the setback. Microsoft is anticipated to follow a similar trajectory.
Ives noted that the cybersecurity sector is ripe for consolidation, and he expects Microsoft to pursue opportunities to strengthen its cybersecurity platform over the next year or so. Microsoft has recently faced challenges related to a global IT outage attributed to a glitch in its cybersecurity software provided by CrowdStrike, which led to disruptions across various sectors including business and government.
Despite Ives affirming that CrowdStrike remains a leading force in cybersecurity, the incident underscores the need for Microsoft to bolster its own cybersecurity capabilities, particularly in light of Google’s abandoned deal.