Wiz’s decision to walk away from a $23 billion acquisition offer from Google has significant implications for the technology sector, particularly for Microsoft. The Israeli cybersecurity startup’s CEO, Assaf Rappaport, explained that the choice to decline the deal was challenging, but necessary for Wiz to pursue its goal of generating $1 billion in annual revenue and eventually going public.
This acquisition would have strengthened Google’s cybersecurity capabilities at a time when the industry was already reeling from a major outage linked to CrowdStrike, a leading cybersecurity firm. According to Wedbush analyst Dan Ives, the breakdown of the deal stemmed from investor apprehensions and ongoing antitrust challenges facing Google, which is currently under scrutiny from regulatory bodies.
Ives expressed in a recent note to investors that the ripple effects of this failed acquisition will be felt throughout the tech sector. He anticipates that despite the collapse of the Wiz deal, Google will continue to invest heavily in expanding its cybersecurity offerings, a trend that will likely be mirrored by Microsoft.
Ives commented that the cybersecurity sector is ripe for consolidation and pointed out that Microsoft might pursue acquisitions to enhance its cybersecurity services in the next year to 18 months. Recently, Microsoft faced criticism during a widespread IT outage attributed to a compromised update from CrowdStrike, which highlighted the vulnerability of its systems. Users worldwide experienced disruptions, underlining the necessity for Microsoft to reinforce its cybersecurity framework, and the failed Google-Wiz transaction further emphasizes this need.