Wiz’s decision to walk away from a potential $23 billion acquisition by Google could significantly impact the technology sector, especially Microsoft. The Israeli cybersecurity startup had been in talks with Google, aiming to enhance its cybersecurity capabilities, particularly following a recent major outage linked to CrowdStrike, another industry leader.
Wiz CEO Assaf Rappaport explained that turning down Google’s offer was a challenging choice, driven by the startup’s goal of achieving $1 billion in annual revenue and planning for an initial public offering (IPO). Wedbush analyst Dan Ives noted that investor apprehensions and ongoing antitrust issues contributed to the breakdown of the deal. Google has faced heightened scrutiny from regulators and has recently concluded a major antitrust trial.
Ives expressed that the absence of the Wiz acquisition will likely create ripple effects within the industry. He anticipates that Google will persist in its efforts to strengthen its cybersecurity presence, a path that Microsoft is also expected to follow. Ives suggested that the cybersecurity sector is ripe for consolidation and indicated that Microsoft may seek to enhance its cybersecurity platform over the next year and a half.
This scrutiny comes at a time when Microsoft itself was recently criticized due to a widespread IT outage caused by a problematic update in CrowdStrike’s software. This incident affected users globally, causing disruptions to businesses and government activities. While Ives continues to consider CrowdStrike a leading figure in cybersecurity, the recent outage highlights the pressing need for Microsoft to bolster its cybersecurity offerings, a necessity that is now even more pronounced following the failed Wiz deal.