Wiz’s decision to back out of a $23 billion acquisition deal with Google is expected to have significant repercussions for the technology sector, particularly for Microsoft. Wiz, an Israeli cybersecurity startup, opted to reject Google’s offer in favor of focusing on building its revenue towards an eventual IPO, as stated by CEO Assaf Rappaport.
The acquisition would have enhanced Google’s position in the cybersecurity market, especially following a major outage linked to the cybersecurity firm CrowdStrike, which impacted various industries last week. Analyst Dan Ives from Wedbush noted in a recent research note that the deal fell through due to investor apprehensions and antitrust challenges facing Google, which has been under increased scrutiny from regulators.
Ives believes that the failure of this deal will have ripple effects throughout the tech industry. He anticipates that Google will strengthen its cybersecurity efforts despite the setback with Wiz, a strategy that Microsoft is also likely to adopt.
Furthermore, Ives pointed out that the cybersecurity sector is poised for consolidation, predicting that Microsoft may pursue opportunities to enhance its own cybersecurity platform in the coming year and a half.
This analysis comes on the heels of a widespread IT outage caused by a software update from CrowdStrike, where Microsoft was implicated since its Windows systems rely on CrowdStrike for cybersecurity measures. The incident led to numerous reports of system failures among Microsoft users globally, highlighting potential vulnerabilities within its cybersecurity infrastructure. Ives still regards CrowdStrike as a leading name in cybersecurity, but the recent events suggest a pressing need for Microsoft to strengthen its cybersecurity operations, especially in light of the unfulfilled acquisition of Wiz.