Wiz’s decision to reject Google’s offer could have significant consequences for Microsoft, according to analysts.
Google had made a move to acquire Israeli cybersecurity firm Wiz for $23 billion, but Wiz CEO Assaf Rappaport announced on Tuesday that the company opted out of the deal. Rappaport explained that the decision was difficult but necessary to focus on growing Wiz’s annual revenue towards $1 billion and preparing for an initial public offering (IPO).
The proposed acquisition was expected to enhance Google’s cybersecurity capabilities, especially following a major outage linked to CrowdStrike, a prominent player in the industry. Analyst Dan Ives of Wedbush noted that investor hesitancy and ongoing antitrust issues contributed to the collapse of the deal. Google has faced heightened antitrust scrutiny recently and has just concluded a trial related to one of its major cases with the Department of Justice.
Ives stated that the impact of this deal falling through would be felt across the tech sector and anticipated that Google would intensify efforts to expand its cybersecurity presence despite the setback. Similarly, he suggested that Microsoft might pursue consolidation in the cybersecurity market in the next 12 to 18 months.
This latest development comes on the heels of a widespread IT outage attributed to a faulty update in CrowdStrike’s cybersecurity software, which affected Microsoft. Users internationally experienced significant disruptions, leading to concerns over the effectiveness of their cybersecurity measures.
While Ives acknowledged that CrowdStrike remains a leading figure in cybersecurity, he indicated that the recent outage signaled that Microsoft should enhance its cybersecurity capabilities, with the failure of the Wiz acquisition further opening up opportunities in this domain.