Wiz’s decision to walk away from Google’s acquisition bid could significantly affect Microsoft’s position in the tech sector, according to analysts.
The search engine leader had proposed purchasing the Israeli cybersecurity firm Wiz for $23 billion, but the offer was declined on Tuesday. Wiz’s CEO, Assaf Rappaport, stated that despite the attractive offer, the company aims to continue its growth towards achieving $1 billion in annual revenue and eventually pursuing an IPO.
The acquisition could have strengthened Google’s cybersecurity capabilities following a substantial outage caused by industry player CrowdStrike last week. Analyst Dan Ives from Wedbush highlighted that investor apprehensions and ongoing antitrust issues contributed to the collapse of the deal, noting that Google is under significant scrutiny from antitrust authorities and recently concluded a trial related to two major cases initiated by the Department of Justice.
Ives predicted that the fallout from this deal’s failure would resonate throughout the industry. He mentioned that Google would likely persist in expanding its cybersecurity initiatives despite losing the partnership with Wiz, a strategy that Microsoft is also expected to adopt.
Ives emphasized that the cybersecurity sector is ripe for consolidation and suggested that Microsoft might seek to enhance its cybersecurity offerings in the next year to year and a half. Microsoft faced negative attention during the recent widespread IT disruption linked to a faulty update from CrowdStrike, which affected its Windows operations. Users across the globe experienced significant interruptions, including business disruptions and flight cancellations.
Though Ives maintains that CrowdStrike remains a leading force in cybersecurity, the recent outage indicates a crucial opportunity for Microsoft to strengthen its cybersecurity division as the failed Wiz acquisition further opens that route.