Wiz’s decision to back out of its potential $23 billion acquisition by Google could have significant repercussions for the tech sector, especially for Microsoft. The Israeli cybersecurity startup, led by CEO Assaf Rappaport, opted to reject Google’s offer in favor of pursuing its goal of achieving $1 billion in annual revenue and preparing for an initial public offering.
This acquisition would have strengthened Google’s cybersecurity division, particularly in light of a recent crisis involving CrowdStrike, a major player in the industry, which experienced a substantial outage last week. Wedbush analyst Dan Ives noted that concerns over investor sentiment and ongoing antitrust issues contributed to the deal’s collapse. Google has faced intense scrutiny from regulators and recently completed a trial in a significant antitrust case with the Department of Justice.
Ives suggested that the failure of this acquisition would create ripple effects throughout the tech industry, stating that Google is likely to intensify its efforts to expand its cybersecurity capabilities. Microsoft is expected to follow suit in fortifying its cybersecurity offerings as well.
He mentioned that consolidation within the cybersecurity space is overdue and anticipates that Microsoft may pursue similar strategies to enhance its cybersecurity platform over the next 12 to 18 months. This urgency comes after a global IT outage linked to CrowdStrike’s faulty software update, which adversely affected Microsoft and led to widespread disruptions across various sectors.
Despite the challenges faced by CrowdStrike, Ives maintains that it remains a leader in cybersecurity. However, the recent outage underscores the necessity for Microsoft to strengthen its cybersecurity business, particularly as Google’s failed acquisition may provide an opportunity for such advancements.