Wiz’s decision to withdraw from the acquisition deal with Google could have significant consequences for Microsoft, according to analysts.
Google was set to acquire Israeli cybersecurity startup Wiz for $23 billion, but the deal was rejected by Wiz on Tuesday. CEO Assaf Rappaport stated that the challenging decision was made to focus on growing the company toward an annual revenue of $1 billion and pursuing an initial public offering.
The cancellation of this deal would have strengthened Google’s cybersecurity offerings, particularly after a recent substantial outage caused by CrowdStrike, a major player in the sector. Wedbush analyst Dan Ives noted that investor apprehensions and ongoing antitrust concerns contributed to the collapse of the acquisition. Google has faced considerable antitrust scrutiny in recent years and recently concluded a trial related to one of its major cases from the Department of Justice.
Ives indicated that the failure of the deal would create ripple effects in the industry, suggesting that Google would likely continue to enhance its cybersecurity initiatives despite losing out on Wiz. He also predicted that Microsoft might seize this opportunity to expand its own cybersecurity capabilities over the next 12 to 18 months.
Microsoft came under fire during the recent global IT outage linked to a problematic update from CrowdStrike, which is integrated into its Windows operating system to detect and prevent cyber threats. Users globally reported system failures, indicating that the outage disrupted critical sectors, including businesses and government functions.
Although Ives regarded CrowdStrike as the leading standard in cybersecurity, the incident has raised questions about Microsoft’s cybersecurity robustness, and with Google’s acquisition attempt falling through, it may potentially motivate Microsoft to strengthen its cybersecurity offerings.