The collapse of what would have been Google’s largest acquisition has significant implications for the tech sector, particularly for Microsoft. Israeli cybersecurity startup Wiz has turned down Google’s $23 billion offer, with CEO Assaf Rappaport indicating that this difficult decision was made to focus on growing Wiz towards an annual revenue of $1 billion and preparing for an IPO.
This decision comes on the heels of a recent major outage caused by CrowdStrike, a significant player in cybersecurity, which rattled the industry. According to Wedbush analyst Dan Ives, concerns from investors and ongoing antitrust challenges contributed to the deal’s failure. Google has faced substantial antitrust scrutiny recently and recently concluded a trial related to one of two major cases brought by the Department of Justice.
Ives noted that the ramifications of this failed deal could send shockwaves through the sector. He anticipates that Google will likely continue to invest heavily in enhancing its cybersecurity capabilities, a trend that is expected to be mirrored by Microsoft.
The analyst pointed out that consolidation in the cybersecurity space is overdue, and he expects Microsoft to pursue strategies aimed at strengthening its cybersecurity platform in the next 12 to 18 months. Microsoft’s visibility has been affected by a widespread IT outage linked to a flaw in cybersecurity software provided by CrowdStrike, which disrupted various sectors, including businesses, flights, and government operations.
While CrowdStrike remains regarded as a leader in the cybersecurity field, the outage signals a potential need for Microsoft to fortify its cybersecurity offerings. The failed partnership with Wiz further opens opportunities for Microsoft to expand its presence in this critical area.