Wiz’s rejection of Google’s acquisition bid could have significant consequences for Microsoft, according to analysts.
The tech giant had sought to acquire the Israeli cybersecurity startup Wiz for $23 billion, but on Tuesday, Wiz CEO Assaf Rappaport announced the decision to turn down the offer. Rappaport described the choice as “tough,” emphasizing the startup’s goal of reaching $1 billion in annual revenue and pursuing an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity capabilities, especially following a major disruption recently caused by CrowdStrike, a leading player in the industry. Wedbush analyst Dan Ives noted that the deal’s collapse stemmed from investor apprehensions and ongoing antitrust issues surrounding Google, which has faced increased scrutiny from regulators, culminating in a recent trial led by the Department of Justice.
Ives commented that the failure of the deal is likely to create reverberations across the tech sector. He anticipates that Google will continue to aggressively expand its cybersecurity initiatives despite losing out on Wiz. Microsoft is expected to follow a similar path.
Ives pointed out that consolidation within the cybersecurity market is overdue and speculated that Microsoft may soon seek to enhance its own cybersecurity offerings in the next 12 to 18 months.
Microsoft recently faced negative attention due to a significant global IT disruption linked to a faulty update from CrowdStrike, which impacted its cybersecurity software. This incident led to widespread reports of systems failures among users and affected various sectors, including business, aviation, and government services.
While Ives regards CrowdStrike as a leading cybersecurity provider, the recent outage serves as a strong indicator that Microsoft could benefit from strengthening its cybersecurity division, especially in light of Google’s failed acquisition.