Wiz’s decision to decline Google’s acquisition offer could significantly affect Microsoft, according to analysts.
Google had planned to acquire the Israeli cybersecurity startup Wiz for $23 billion, but on Tuesday, Wiz CEO Assaf Rappaport announced that the company would not proceed with the deal. Rappaport explained that the choice was difficult, but necessary for Wiz to focus on achieving $1 billion in annual revenue and preparing for an initial public offering (IPO).
The acquisition would have enhanced Google’s cybersecurity services, especially following a major outage caused by CrowdStrike, a leading firm in the industry, just days earlier. Analyst Dan Ives from Wedbush noted that investor apprehensions and ongoing antitrust challenges contributed to the deal falling through. Google has faced intense scrutiny regarding its market practices and has recently concluded a trial related to antitrust issues brought by the Department of Justice.
Ives highlighted that the failure of the Wiz acquisition would have broader implications for the cybersecurity sector. He anticipates that Google will continue to prioritize expanding its cybersecurity capabilities, and suggests that Microsoft may follow suit in the coming months.
He also pointed out that the cybersecurity sector is ripe for consolidation and expects Microsoft to enhance its cybersecurity offerings following the outage that affected users globally. This incident involved a faulty update to CrowdStrike’s software, which prevented many Microsoft users from accessing their systems, disrupting various industries, including transport and government operations.
While Ives maintains that CrowdStrike remains a leader in the cybersecurity space, the recent outage indicates a pressing need for Microsoft to strengthen its cybersecurity initiatives, especially with Google’s acquisition attempt now off the table.