The recent decision by Wiz to decline Google’s $23 billion acquisition offer could significantly affect the tech industry, particularly Microsoft. The Israeli cybersecurity startup’s CEO Assaf Rappaport announced that he made the challenging choice to forgo the offer to continue developing Wiz towards achieving $1 billion in annual revenue and preparing for an IPO.
This acquisition would have strengthened Google’s position in cybersecurity, especially following a severe outage experienced by CrowdStrike, a key player in the industry, just last week. Analyst Dan Ives from Wedbush highlighted that investor apprehensions and antitrust challenges were pivotal in derailing the deal. Google has faced considerable antitrust scrutiny recently and has just concluded a trial linked to one of two significant cases brought by the Department of Justice.
Ives indicated that the failure of this deal would have a ripple effect throughout the sector, suggesting that Google will likely intensify efforts to expand its cybersecurity capabilities despite the setback. Similarly, he anticipates that Microsoft will also pursue strengthening its cybersecurity offerings in response.
The discussion around consolidation in the cybersecurity sector is gaining traction, with Ives projecting that Microsoft may look to enhance its cybersecurity platform in the coming 12 to 18 months. This consideration comes in light of a global IT outage last week caused by a flawed update from CrowdStrike, which impacted Microsoft’s users and highlighted vulnerabilities in its cybersecurity measures.
While Ives maintains that CrowdStrike remains a leading name in cybersecurity, the recent incident suggests that Microsoft may need to fortify its cybersecurity portfolio, a path opened further by the collapse of the Google-Wiz deal.