Wiz’s decision to walk away from a potential $23 billion acquisition by Google could significantly impact the technology sector, particularly Microsoft.
Wiz, an Israeli cybersecurity startup, opted to reject Google’s offer in favor of focusing on its goal of achieving $1 billion in annual revenue and pursuing an initial public offering (IPO), according to CEO Assaf Rappaport. This move comes on the heels of a recent major outage in the cybersecurity industry caused by CrowdStrike, a competitor.
Analysts suggest that the breakdown of this deal has broader implications for the industry. Wedbush analyst Dan Ives noted in his research that concerns among investors and ongoing antitrust issues contributed to the collapse of the acquisition. Google has faced heightened scrutiny regarding antitrust matters and recently concluded a trial linked to two significant cases from the Department of Justice.
Ives expressed that the fallout from the failed acquisition could ripple across the cybersecurity sector. He believes that Google will likely continue to expand its cybersecurity offerings despite missing out on Wiz, and Microsoft is expected to follow suit.
He commented that consolidation within the cybersecurity industry is overdue and anticipates that Microsoft will seek to enhance its cybersecurity platform over the next year to 18 months. This need for improvement was underscored by Microsoft’s involvement in a global IT outage due to a malfunction in its cybersecurity software provided by CrowdStrike. This incident disrupted various operations, including businesses and flights, as users reported issues with Microsoft’s systems.
While Ives still regards CrowdStrike as a leader in cybersecurity, the recent outage suggests that there is room for Microsoft to strengthen its offerings, making the potential for further investment in cybersecurity even more likely following the dissolution of the Wiz deal.