Wiz’s decision to withdraw from a $23 billion acquisition by Google may have significant consequences for the technology sector, particularly for Microsoft. The Israeli cybersecurity startup, led by CEO Assaf Rappaport, opted to reject Google’s offer in favor of pursuing independent growth towards a projected annual revenue of $1 billion and a future IPO.
This acquisition would have strengthened Google’s cybersecurity portfolio following a recent major outage experienced by CrowdStrike, a leading industry player. According to Wedbush analyst Dan Ives, investor concerns and ongoing antitrust issues contributed to the collapse of the deal. Google has faced heightened scrutiny regarding antitrust practices, and it has recently concluded a trial connected to one of its two major cases filed by the Department of Justice.
Ives suggested that the failure of the Wiz acquisition will have ripple effects throughout the cybersecurity sector. He emphasized that Google will likely intensify its efforts to expand its cybersecurity capabilities, a trend that Microsoft may also pursue.
Ives noted, “We believe consolidation is overdue in the cybersecurity sector and we would expect Microsoft to potentially go down this path and look to beef up its own cybersecurity platform over the coming 12 to 18 months.”
The discussion arises in light of a significant global IT outage caused by a flawed update to cybersecurity software from CrowdStrike, which impacted Microsoft’s Windows operating system. This incident resulted in widespread disruptions for businesses, flights, and government operations. Despite Ives maintaining that CrowdStrike remains a leading force in cybersecurity, the incident indicates that Microsoft may need to enhance its cybersecurity measures, a possibility further encouraged by the unsuccessful Google deal.