Wiz’s decision to reject Google’s acquisition offer could have significant ramifications for Microsoft, according to analysts.
Google was planning to acquire Israeli cybersecurity firm Wiz for $23 billion, but the deal fell through after Wiz CEO Assaf Rappaport stated that he opted to forgo the offer to focus on growing the company towards an annual revenue of $1 billion and an eventual IPO.
This deal’s failure comes at a time when Google’s cybersecurity division was expected to grow significantly following a major outage caused by CrowdStrike, an incident that has raised concerns in the tech industry. Dan Ives, an analyst at Wedbush, indicated in a research note that investor apprehensions and antitrust issues led to the breakdown of negotiations. Google has faced extensive antitrust scrutiny in recent years, recently concluding a trial linked to one of the major cases brought forth by the Department of Justice.
Ives stated that the absence of this acquisition would create ripple effects in the cybersecurity sector, forecasting that Google will likely intensify its efforts to enhance its cybersecurity presence regardless of the failed deal. He also pointed out that Microsoft, as a competitor, might seize the opportunity to strengthen its cybersecurity platform in the next 12 to 18 months.
The recent global IT outage, which was the result of a faulty update to CrowdStrike’s cybersecurity software, highlighted the vulnerabilities in Microsoft’s systems. Many users reported experiencing critical issues, including severe disruptions in business operations, flights, and government services.
Despite the CrowdStrike outage, Ives still regards the company as the “gold standard” in cybersecurity, but it raises questions about Microsoft’s own cybersecurity measures. The failed Google-Wiz deal only opens avenues for Microsoft to enhance its cybersecurity offerings further.