Wiz’s decision to withdraw from a potential $23 billion acquisition by Google could have significant effects on the tech sector, particularly impacting Microsoft.
The Israeli cybersecurity startup Wiz, led by CEO Assaf Rappaport, chose to forgo Google’s offer in favor of focusing on its growth and a goal of achieving $1 billion in annual revenue before considering an IPO. This acquisition would have strengthened Google’s cybersecurity offerings, especially following a recent industry disruption caused by a massive outage involving CrowdStrike, a major player in the cybersecurity space.
Wedbush analyst Dan Ives noted that the failure of the acquisition deal stemmed from concerns among investors and ongoing antitrust issues surrounding Google, which has faced intense scrutiny and recently concluded a significant trial related to antitrust matters.
Ives believes the fallout from the collapsed deal will have widespread repercussions across the technology sector. He suggested that Google will continue to expand its cybersecurity capabilities, a strategy that Microsoft is likely to follow as well. He indicated that consolidation in the cybersecurity field is overdue and that Microsoft may consider enhancing its cybersecurity offerings within the next year and a half.
Additionally, Microsoft recently faced criticism amidst a global IT outage linked to a defective cybersecurity software update from CrowdStrike. This incident highlighted vulnerabilities, suggesting that Microsoft has room for improvement in its cybersecurity services. While Ives maintains that CrowdStrike remains a leader in the field, the disruptions experienced may prompt Microsoft to fortify its cybersecurity initiatives further, especially after the Wiz deal fell through.