Wiz’s decision to back out of a potential $23 billion acquisition by Google could have significant implications for the tech sector, particularly for Microsoft.
Wiz, an Israeli cybersecurity startup, opted to decline Google’s offer, with CEO Assaf Rappaport stating that the challenging decision was made in pursuit of the company’s goal to reach $1 billion in annual revenue and eventually pursue an IPO. This deal’s cancellation comes after a recent major outage attributed to CrowdStrike, an industry leader in cybersecurity.
According to Wedbush analyst Dan Ives, factors such as investor concerns and antitrust issues contributed to the deal’s collapse. Google has faced considerable antitrust scrutiny and recently concluded a trial regarding one of the Department of Justice’s significant cases against it.
Ives noted that the failed acquisition could have ripple effects across the cybersecurity sector. He anticipates that Google will continue to focus on expanding its cybersecurity offerings, a strategy that Microsoft is also likely to pursue.
Ives suggested that consolidation within the cybersecurity market is necessary and predicted that Microsoft might seek to enhance its cybersecurity platform over the next 12 to 18 months. This need for bolstered cybersecurity comes after a global IT outage linked to a faulty CrowdStrike update, which disrupted operations worldwide, including businesses and government services. Despite the incident, Ives maintains that CrowdStrike remains a leading name in cybersecurity. However, the failure of the Google deal may present Microsoft with an opportunity to strengthen its position in the cybersecurity landscape.