Wiz’s decision to back out of a proposed $23 billion acquisition by Google could have significant ramifications for the tech sector, particularly for Microsoft.
Wiz, an Israeli cybersecurity startup, chose to decline Google’s offer as CEO Assaf Rappaport aims to grow the company toward achieving $1 billion in annual revenue and pursuing an initial public offering (IPO). The move comes at a time when the cybersecurity landscape is already under pressure, following a major outage caused by CrowdStrike, a competing firm, just last week.
Wedbush analyst Dan Ives noted that the failed deal raises investor concerns and highlights ongoing antitrust issues surrounding Google, which is currently under intense scrutiny and has recently concluded a trial related to two significant cases from the Department of Justice.
In an email to investors, Ives commented, “We believe there will be ripple impacts across the sector from this deal not happening.” He suggested that while the Wiz acquisition fell through, Google is expected to intensify its focus on expanding its cybersecurity capabilities. Microsoft is likely to follow suit as well.
Ives indicated that consolidation within the cybersecurity industry is overdue, and Microsoft may look to strengthen its cybersecurity platform in the next 12 to 18 months. The company recently faced backlash during a global IT outage caused by a problematic update to its cybersecurity software provided by CrowdStrike. This incident disrupted operations across various sectors, including businesses, transportation, and government services, and sparked reports from Microsoft users about encountering critical system errors.
While Ives maintains that CrowdStrike remains a leading provider in cybersecurity, he suggests that the recent outage underscores the need for Microsoft to enhance its cybersecurity offerings, particularly in light of the opportunities presented by Google’s failed acquisition of Wiz.