Wiz’s decision to walk away from a potential $23 billion acquisition by Google is poised to significantly affect the tech sector, particularly Microsoft. The Israeli cybersecurity firm Wiz chose not to accept Google’s offer as it aims to grow towards generating $1 billion in annual revenue and pursuing an initial public offering.
The acquisition would have enhanced Google’s cybersecurity portfolio, especially following a major outage last week linked to CrowdStrike, a leading company in the industry. Analyst Dan Ives from Wedbush indicated that concerns from investors and ongoing antitrust challenges contributed to the collapse of the deal. Google has faced heightened antitrust scrutiny and recently concluded a trial regarding one of its major legal challenges from the Department of Justice.
Ives highlighted the potential broader impacts of this deal’s failure, stating that it would likely lead to heightened efforts by both Google and Microsoft to expand their cybersecurity capabilities. He emphasized that consolidation within the cybersecurity sector is necessary, suggesting that Microsoft may pursue strengthening its cybersecurity platform in the next 12 to 18 months.
Microsoft recently faced criticism due to widespread disruptions caused by an update to its cybersecurity software provided by CrowdStrike. This incident affected many users globally, leading to significant operational disturbances. Despite Ives praising CrowdStrike as the industry leader in cybersecurity, he noted that the recent outage could signal a need for Microsoft to enhance its cybersecurity offerings, especially given Google’s unsuccessful acquisition attempt.