Wiz’s decision to withdraw from a potential $23 billion acquisition by Google could have significant consequences for Microsoft and the broader tech industry. Wiz, an Israeli cybersecurity startup, chose to decline Google’s offer to continue its growth trajectory towards achieving $1 billion in annual revenue and preparing for an initial public offering (IPO), according to CEO Assaf Rappaport.
This acquisition would have enhanced Google’s cybersecurity portfolio, especially following a major outage affecting the industry caused by CrowdStrike, another key player, just last week. Wedbush analyst Dan Ives noted that concerns from investors and ongoing antitrust scrutiny contributed to the collapse of the deal. Google is currently under intense examination regarding its market practices, having recently wrapped up a trial related to antitrust issues.
Ives expressed in a research note that the failed acquisition could create ripple effects across the cybersecurity sector. Despite not acquiring Wiz, he anticipates that Google will continue to aggressively expand its cybersecurity capabilities, a trend expected to be mirrored by Microsoft.
He indicated that consolidation within the cybersecurity sector has become necessary and predicted that Microsoft may look to strengthen its own cybersecurity offerings in the coming year. Microsoft faced scrutiny after a wide-scale global IT outage linked to a flawed update from CrowdStrike, which affected its Windows operating system. Users experienced significant disruptions, raising questions about Microsoft’s cybersecurity practices amidst the fallout.
While Ives maintains that CrowdStrike remains a leader in cybersecurity, the recent outage indicates a need for Microsoft to enhance its security measures, a gap that Google’s abandoned acquisition has further exposed.