The recent decision by cybersecurity startup Wiz to turn down a $23 billion acquisition offer from Google could have significant ramifications for Microsoft and the broader tech sector. Wiz’s CEO, Assaf Rappaport, stated that he made the difficult choice to reject the deal to focus on growing the company towards an annual revenue target of $1 billion and ultimately pursuing an IPO.
This potential acquisition was poised to enhance Google’s cybersecurity portfolio, particularly in light of recent disruptions caused by a major outage from cybersecurity firm CrowdStrike. According to Wedbush analyst Dan Ives, concerns from investors and ongoing antitrust challenges contributed to the collapse of the acquisition talks. Google has faced intense scrutiny from regulators and recently concluded a major trial linked to antitrust issues.
Ives highlighted that the fallout from this failed deal may resonate across the industry, suggesting that both Google and its competitor Microsoft are likely to intensify their cybersecurity efforts. He anticipates that Microsoft may seek to strengthen its cybersecurity capabilities in the next 12 to 18 months, a move he believes is overdue given the current state of the sector.
Microsoft recently faced criticism following a global IT outage attributed to a problematic update in CrowdStrike’s cybersecurity software. This incident, which affected many users and disrupted various services, underlines the pressing need for stronger cybersecurity measures. While Ives acknowledges that CrowdStrike remains a leading name in cybersecurity, the recent outage signals an opportunity for Microsoft to enhance its own cybersecurity offerings, especially in light of Google’s failed acquisition of Wiz.