Wiz’s decision to decline a $23 billion acquisition offer from Google is expected to have significant repercussions for the technology sector, particularly for Microsoft. Wiz, an Israeli cybersecurity startup, opted out of the deal to focus on achieving $1 billion in annual revenue and planning for an eventual IPO, according to CEO Assaf Rappaport.
The acquisition would have enhanced Google’s cybersecurity capabilities in the wake of recent confidence-shaking events due to a massive outage attributed to CrowdStrike, a major player in the industry. Analyst Dan Ives from Wedbush stated that the collapse of the deal was influenced by investor apprehensions and ongoing antitrust investigations faced by Google, which recently concluded a trial related to one of two high-profile cases from the Department of Justice.
Ives emphasized that the unsuccessful acquisition would create ripple effects throughout the sector, suggesting that Google would likely intensify its efforts to strengthen its cybersecurity division despite the setback. He also speculated that Microsoft may pursue its own strategy to enhance its cybersecurity services in the coming year to 18 months.
Microsoft has been under scrutiny following significant disruptions caused by CrowdStrike’s software, which impacted users globally, leading to widespread reports of system failures. Although Ives reaffirmed CrowdStrike’s status as the “gold standard” for cybersecurity, the incident indicates the need for Microsoft to reinforce its cybersecurity offerings, a need that the failed Google-Wiz deal may exacerbate.