Wiz’s decision to back out of a $23 billion deal with Google could significantly affect the tech landscape, specifically impacting Microsoft. The Israeli cybersecurity startup, led by CEO Assaf Rappaport, chose to reject Google’s acquisition offer to focus on achieving $1 billion in annual revenue and preparing for an IPO.
This acquisition was seen as a way for Google to strengthen its cybersecurity services, especially following a major outage attributed to CrowdStrike, a major player in the field. Dan Ives, an analyst at Wedbush, noted that the collapse of this deal stemmed from investor anxieties and ongoing antitrust challenges that Google faces. Given the intense scrutiny over its business practices, Google recently concluded a trial related to two significant antitrust lawsuits brought forth by the Department of Justice.
Ives stated that the failure of the Wiz deal would likely have broader implications across the cybersecurity sector, suggesting that Google would persist in enhancing its cybersecurity capabilities, a sentiment echoed by its competitor Microsoft.
He pointed out that there is a growing need for consolidation within the cybersecurity space, indicating that Microsoft may seek to enhance its cybersecurity offerings in the coming year to 18 months. Microsoft recently found itself in a difficult situation due to a global IT outage caused by an update to its cybersecurity software provided by CrowdStrike, highlighting potential vulnerabilities in its system.
Despite the issues faced, Ives continues to regard CrowdStrike as the leading standard in cybersecurity, but he suggests that the recent outage emphasizes the need for Microsoft to strengthen its cybersecurity portfolio, an opportunity that the failed Google-Wiz deal now presents.