Wiz’s decision to walk away from the $23 billion acquisition offer from Google could have significant repercussions for the tech industry, particularly for Microsoft.
The Israeli cybersecurity startup, Wiz, opted against the deal, as CEO Assaf Rappaport stated that the choice was challenging but necessary to continue pursuing the goal of achieving $1 billion in annual revenue and preparing for an initial public offering. This acquisition would have strengthened Google’s position in cybersecurity, following a major outage related to the industry that occurred recently with CrowdStrike.
According to Wedbush analyst Dan Ives, concerns from investors and ongoing antitrust issues contributed to the breakdown of the deal. Google has faced increasing scrutiny from regulators and has recently concluded a major trial with the Department of Justice.
Ives indicated in a note to investors that the failure of the Wiz acquisition would have broader effects throughout the sector. He predicted that Google would likely increase its efforts to enhance its cybersecurity capabilities, a move that Microsoft would also pursue.
He expressed the belief that the cybersecurity sector is ripe for consolidation and suggested that Microsoft may look to strengthen its own cybersecurity platform in the next 12 to 18 months. This comes in light of a widespread outage caused by CrowdStrike’s cybersecurity software, which impacted Microsoft’s operation and led to significant disruptions globally.
Despite the recent troubles, Ives reaffirmed his view that CrowdStrike remains a benchmark in cybersecurity. Nevertheless, this incident may prompt Microsoft to enhance its security offerings, and the missed opportunity with Wiz could further encourage this strategy.