Wiz’s decision to walk away from a $23 billion acquisition offer from Google is poised to have significant repercussions for the tech industry, particularly affecting Microsoft. The Israeli cybersecurity startup Wiz, led by CEO Assaf Rappaport, opted to reject Google’s proposal in favor of pursuing its growth objectives, aiming for $1 billion in annual revenue and a future initial public offering.
This acquisition, if it had gone through, would have enhanced Google’s cybersecurity capabilities amidst heightened concerns following a recent major outage linked to competition from CrowdStrike. In a research note, Wedbush analyst Dan Ives indicated that worries among investors and ongoing antitrust issues were key factors in the deal’s collapse. Google has faced scrutiny from regulators and recently concluded its trial related to one of two significant cases brought by the Department of Justice.
Ives suggested that the repercussions of the deal’s failure would ripple throughout the tech sector. He anticipates that Google will persist in strengthening its cybersecurity efforts despite the setback, a trend likely mirrored by Microsoft. Ives noted that the cybersecurity sector is ripe for consolidation and predicted that Microsoft might explore avenues to enhance its cybersecurity offerings in the next 12 to 18 months.
Microsoft’s visibility in the cybersecurity arena has recently taken a hit following a severe global IT disruption caused by a flawed update in its CrowdStrike-powered software. This incident led to widespread reports of the infamous “blue screens of death” among users, significantly hampering businesses, flights, and government functions. Although Ives still regards CrowdStrike as the benchmark in cybersecurity, this outage underscores the necessity for Microsoft to bolster its cybersecurity presence, with the failed Google-Wiz deal potentially paving the way for further developments.