Wiz’s decision to walk away from a $23 billion acquisition deal with Google could significantly impact the tech industry, particularly Microsoft’s position.
The Israeli cybersecurity startup Wiz turned down Google’s offer with CEO Assaf Rappaport stating that the decision, although difficult, was made to focus on growing the company towards achieving $1 billion in annual revenue and preparing for an initial public offering (IPO).
This acquisition would have enhanced Google’s cybersecurity capabilities, especially following a recent major outage at CrowdStrike, a significant player in the industry. Analyst Dan Ives from Wedbush pointed out that the failure of the deal arose from investor apprehensions and ongoing antitrust challenges faced by Google. The tech giant has been under considerable scrutiny regarding antitrust issues and recently concluded a trial related to one of two pivotal cases filed by the Department of Justice.
Ives noted that the collapse of this deal could have widespread consequences throughout the sector. Despite the setback, he anticipates that Google will continue to expand its cybersecurity initiatives, a move that may also be mirrored by its competitor, Microsoft.
Ives mentioned that consolidation in the cybersecurity sector is needed and suggested that Microsoft might seek to strengthen its cybersecurity platform in the next year to year and a half. This follows a troubling incident where a significant IT outage occurred due to a faulty update to CrowdStrike’s software, which Microsoft uses for its Windows operating systems. Reports of system failures impacted services globally, leading to widespread disruptions.
While Ives maintains that CrowdStrike remains a top-tier cybersecurity provider, the recent outage underscores the necessity for Microsoft to enhance its cybersecurity measures, making the aborted Google-Wiz deal an opening for further advancements in this area.