Wiz’s decision to withdraw from a potential $23 billion acquisition by Google could have significant repercussions for the technology sector, particularly for Microsoft.
Wiz, an Israeli cybersecurity startup, opted not to accept Google’s offer, as CEO Assaf Rappaport expressed the need to focus on building the company toward its goal of achieving $1 billion in annual revenue and pursuing an IPO. This decision follows a substantial disruption in the cybersecurity landscape resulting from a recent major outage linked to CrowdStrike, a leading industry player.
In a note to investors, Wedbush analyst Dan Ives attributed the deal’s failure to investor apprehensions and increasing antitrust concerns surrounding Google. The company has faced heightened scrutiny and is currently involved in legal proceedings with the Department of Justice regarding antitrust issues.
Ives stated that the repercussions of this deal not being finalized would have widespread effects throughout the industry. He noted that, despite the setback, Google is likely to intensify its efforts in expanding its cybersecurity capabilities. Similarly, Microsoft may also look to strengthen its position in the cybersecurity arena.
Ives emphasized that consolidation within the cybersecurity sector is overdue, suggesting that Microsoft would seek to enhance its cybersecurity offerings over the next year to 18 months. This comes in light of the recent global IT outage caused by a faulty update to CrowdStrike’s software, which not only impacted Microsoft’s systems but also led to widespread disruptions across businesses, flights, and government functions.
While Ives maintains that CrowdStrike remains a benchmark in cybersecurity, the recent outage may indicate that Microsoft needs to enhance its cybersecurity infrastructure further, a necessity that could be amplified by the context of Google’s failed acquisition attempt.