The cancellation of Google’s proposed $23 billion acquisition of Israeli cybersecurity firm Wiz may significantly impact the tech sector, particularly Microsoft. Wiz CEO Assaf Rappaport announced the decision to decline Google’s offer, choosing instead to pursue $1 billion in annual revenue and an eventual initial public offering (IPO).
The acquisition would have enhanced Google’s cybersecurity capabilities at a crucial time, following a major outage experienced by CrowdStrike, a key player in the industry. Analyst Dan Ives from Wedbush noted that concerns from investors and ongoing antitrust issues contributed to the deal’s failure. Google has been under severe scrutiny regarding antitrust matters and recently concluded a trial related to one of two major cases brought by the Department of Justice.
Ives commented that the ripple effects from this deal’s collapse are expected to span the cybersecurity sector. He anticipates that Google will continue to invest in expanding its cybersecurity offerings, a trend likely to be mirrored by Microsoft.
Ives highlighted that the cybersecurity sector is ripe for consolidation and suggested that Microsoft may seek to strengthen its cybersecurity portfolio within the next year to 18 months. This comes in light of a recent global IT disruption involving a faulty update from CrowdStrike, which impacted Microsoft’s software and caused extensive problems for users worldwide.
While Ives still regards CrowdStrike as the leading name in cybersecurity, the recent outage indicates that reinforcing cybersecurity measures is crucial for Microsoft, especially considering the missed opportunity with the Wiz deal.