Wiz’s decision to back out of a potential $23 billion acquisition by Google could have significant implications for the technology sector, particularly for Microsoft.
The Israeli cybersecurity startup, led by CEO Assaf Rappaport, turned down the offer, stating that the decision, although difficult, was made to prioritize Wiz’s goal of reaching $1 billion in annual revenue and ultimately pursuing an IPO.
Had the acquisition gone through, it would have enhanced Google’s cybersecurity capabilities, especially following a recent major service outage caused by CrowdStrike, a significant player in the industry. Dan Ives, an analyst at Wedbush, noted that investor apprehensions and antitrust issues were pivotal in the deal’s collapse. Google has faced considerable antitrust scrutiny and recently concluded a trial related to a major case from the Department of Justice.
Ives remarked that the fallout from this failed deal could have widespread effects across the cybersecurity sector. He anticipates that Google will intensify its focus on expanding its cybersecurity offerings, a sentiment likely mirrored by Microsoft.
Ives also highlighted the pressing need for consolidation in the cybersecurity field, suggesting that Microsoft might explore opportunities to strengthen its own cybersecurity services in the next year to 18 months. Microsoft faced criticism recently due to a global IT failure connected to an inadequate update from CrowdStrike, which impacted its systems and disrupted services worldwide.
Despite maintaining that CrowdStrike is still regarded as the benchmark in cybersecurity, the recent outage indicates an opportunity for Microsoft to enhance its cybersecurity offerings, particularly in light of Google’s unsuccessful acquisition attempt.