Wiz’s decision to walk away from a potential $23 billion acquisition by Google could have significant repercussions for the tech industry, particularly for Microsoft. The Israeli cybersecurity startup, led by CEO Assaf Rappaport, chose the difficult path of rejecting Google’s offer, opting instead to focus on achieving $1 billion in annual revenue and preparing for an initial public offering (IPO).
This acquisition would have strengthened Google’s position in cybersecurity, especially following a major outage attributed to cybersecurity giant CrowdStrike that rattled the industry last week. Analyst Dan Ives from Wedbush noted that concerns among investors and ongoing antitrust investigations were contributing factors to the deal’s collapse. Google has faced increased antitrust scrutiny, culminating in a recent trial linked to one of two significant cases initiated by the Department of Justice.
Ives highlighted in a communication to investors that the failure of this deal would likely create ripple effects throughout the sector. He anticipates that Google will still prioritize expanding its cybersecurity capabilities, a strategy Microsoft may also pursue.
Ives mentioned that the cybersecurity sector is due for consolidation, suggesting that Microsoft may seek to enhance its cybersecurity offerings in the next year to year and a half. Microsoft’s own challenges were made evident during a global IT outage triggered by a problematic software update from CrowdStrike. This incident led to numerous reports of system failures among Windows users globally, disrupting businesses, flights, and government services.
While Ives still regards CrowdStrike as the leader in cybersecurity, the recent outage indicates that Microsoft might need to enhance its cybersecurity measures, with the failed acquisition further opening avenues for improvement.