Wiz’s decision to walk away from a substantial acquisition deal with Google will likely have significant repercussions for the tech sector, especially for Microsoft.
Initially, Google aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but on Tuesday, Wiz’s CEO, Assaf Rappaport, stated that the company decided to turn down the offer to focus on its goal of generating $1 billion in annual revenue and pursuing an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity capabilities, particularly following a recent major outage impacting the cyber landscape due to an incident involving CrowdStrike. In a note to investors, Wedbush analyst Dan Ives indicated that issues related to investor sentiment and antitrust concerns were key factors in the deal’s collapse. Google has faced significant antitrust scrutiny over the past few years and recently completed a trial concerning one of two significant cases instigated by the Department of Justice.
Ives noted that the failure of the Wiz deal would create “ripple impacts” across the cybersecurity industry. He suggested that Google would probably intensify its efforts to expand its cybersecurity services, a strategy that Microsoft is also expected to follow.
Ives emphasized that there is an urgent need for consolidation in the cybersecurity sector and predicted that Microsoft might take steps to enhance its cybersecurity platform in the next 12 to 18 months.
The recent events have placed Microsoft in a difficult position, especially after the widespread global IT outage caused by a faulty update to CrowdStrike’s cybersecurity software last Friday. This incident severely impacted users of Microsoft’s Windows operating systems, leading to reports of various operational disruptions worldwide.
Despite Ives maintaining that CrowdStrike remains the “gold standard” in cybersecurity, the outage highlighted vulnerabilities that could prompt Microsoft to further strengthen its cybersecurity offerings, with the failed Google-Wiz deal potentially creating more opportunities for growth in this area.