Wiz’s decision to walk away from a potential $23 billion acquisition by Google could significantly impact the technology sector, particularly Microsoft. The Israeli cybersecurity startup, led by CEO Assaf Rappaport, opted not to accept Google’s offer, choosing instead to focus on its goal of reaching $1 billion in annual revenue and preparing for an initial public offering.
This acquisition, which would have strengthened Google’s cybersecurity capabilities, fell through right after a major outage linked to CrowdStrike, a prominent player in the industry. Dan Ives, an analyst at Wedbush, noted in a research update that investor apprehensions and ongoing antitrust challenges contributed to the collapse of the deal. Google has faced heightened scrutiny from antitrust regulators and recently concluded a trial related to one of two significant cases against it by the Department of Justice.
Ives pointed out that the failure of the Wiz deal could create ripples across the cybersecurity sector. He anticipates that Google will continue to invest aggressively in bolstering its cybersecurity initiatives despite its setback with Wiz, and he expects Microsoft to follow suit.
Ives indicated that there is a pressing need for consolidation within the cybersecurity industry, and he foresees Microsoft exploring opportunities to strengthen its cybersecurity solutions over the next year to 18 months. Microsoft itself has recently faced criticism due to a global IT outage associated with a problematic update to its cybersecurity software, which impacted numerous operations worldwide.
While Ives regards CrowdStrike as still maintaining “gold standard” status in cybersecurity, the recent disruption highlights the necessity for Microsoft to enhance its cybersecurity portfolio, and the abandonment of the Wiz acquisition may further propel this initiative.