Wiz’s decision to walk away from a potential $23 billion acquisition by Google holds significant implications for the tech sector, particularly Microsoft.
Wiz, an Israeli cybersecurity startup, turned down Google’s offer, with CEO Assaf Rappaport stating that the choice was made to focus on growing Wiz towards an ambitious target of $1 billion in annual revenue and an eventual Initial Public Offering (IPO). This deal, if it had gone through, would have strengthened Google’s cybersecurity offerings, especially in light of a recent major outage from CrowdStrike, a significant player in the industry.
Wedbush analyst Dan Ives attributed the failure of the acquisition to investor apprehensions and ongoing antitrust issues surrounding Google. The search giant has faced considerable scrutiny and recently concluded a trial related to one of two major antitrust cases initiated by the Department of Justice.
In his analysis, Ives predicted that this development would generate broader repercussions across the sector, suggesting that Google will remain aggressive in enhancing its cybersecurity capabilities despite the collapse of the Wiz deal. Similarly, Ives anticipates that Microsoft will pursue opportunities to strengthen its own cybersecurity platform in the next 12 to 18 months, recognizing a need for consolidation in this segment.
Microsoft recently faced criticism due to a widespread IT outage linked to a problematic update in its cybersecurity software, provided by CrowdStrike. This incident disrupted various functions globally, prompting users to encounter system failures. Despite Ives deeming CrowdStrike as the continued “gold standard” of cybersecurity, it indicated to Microsoft the necessity of fortifying its cybersecurity assets, a need made more pronounced by Google’s abandoned acquisition.