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 firm Wiz was in discussions to be purchased by Google, but CEO Assaf Rappaport announced on Tuesday that they would decline the offer to focus on achieving a billion-dollar annual revenue and eventually pursue an IPO.
This acquisition would have strengthened Google’s cybersecurity arm, especially following a significant outage linked to CrowdStrike that affected the industry last week. Wedbush analyst Dan Ives noted in a research update that worries among investors and ongoing antitrust scrutiny contributed to the deal’s collapse. Google has been facing heightened legal challenges, concluding one of two significant lawsuits from the Department of Justice.
Ives mentioned that the failed acquisition could have “ripple impacts” throughout the sector. Despite this setback, he believes Google will persist in enhancing its cybersecurity capabilities, a sentiment shared by Microsoft.
Ives expressed that the cybersecurity industry is ripe for consolidation and predicted that Microsoft may look to expand its cybersecurity offerings in the next year to 18 months.
Microsoft was recently under scrutiny due to a global IT outage triggered by an issue with its cybersecurity software from CrowdStrike. Users experienced numerous disruptions, leading to widespread business, travel, and government operation interruptions. While Ives still regards CrowdStrike as a leading name in cybersecurity, the incident highlights a growing need for Microsoft to strengthen its security measures, further emphasized by Google’s abandoned acquisition move.