Wiz’s decision to back out of a potential $23 billion acquisition by Google could have significant repercussions for the tech industry, particularly for Microsoft. Wiz, an Israeli cybersecurity startup, opted to decline the offer to focus on growing its business towards achieving $1 billion in annual revenue and pursuing an initial public offering.
This acquisition would have strengthened Google’s cybersecurity division, especially in light of a recent widespread outage linked to CrowdStrike, a major player in the industry. Following the announcement of Wiz’s decision, Wedbush analyst Dan Ives highlighted that concerns from investors and ongoing antitrust issues contributed to the disintegration of the deal. Google is currently under considerable scrutiny regarding antitrust matters and has recently concluded a trial related to two significant cases from the Department of Justice.
Ives noted the likelihood of ripple effects throughout the tech sector due to this deal’s failure. He anticipates Google will intensify efforts to expand its cybersecurity capabilities, and Microsoft may also pursue similar strategies. Ives expressed that consolidation in the cybersecurity market is overdue, predicting that Microsoft might seek to enhance its cybersecurity platform in the next year to 18 months.
Microsoft faced challenges following a significant global IT outage attributed to a problematic update in the cybersecurity software it utilizes from CrowdStrike. During this outage, users experienced system failures, impacting businesses, flights, and government services worldwide. While Ives continues to regard CrowdStrike as a top-tier security provider, the incident suggests that Microsoft should strengthen its cybersecurity offerings, particularly with the recent developments involving Google’s aborted acquisition.