Wiz’s decision to decline a $23 billion acquisition offer from Google could have significant consequences for the technology sector, particularly for Microsoft. The Israeli cybersecurity startup, led by CEO Assaf Rappaport, opted out of the deal to focus on building Wiz towards the goal of generating $1 billion in annual revenue and preparing for an initial public offering.
This acquisition would have enhanced Google’s cybersecurity capabilities, especially in the wake of a major service interruption attributed to CrowdStrike last week. Analyst Dan Ives from Wedbush noted that investor apprehensions and ongoing antitrust challenges were factors contributing to the deal’s collapse. Google has faced increased scrutiny from antitrust regulators and recently concluded a trial linked to one of two major Department of Justice cases.
Ives remarked that the failure of this acquisition would have industry-wide repercussions. He anticipates that Google will continue to enhance its cybersecurity initiatives despite the setback, a sentiment that extends to Microsoft as well.
Ives highlighted an expectation for increased consolidation within the cybersecurity landscape, suggesting that Microsoft may seek to strengthen its cybersecurity offerings over the next 12 to 18 months. Recently, Microsoft faced criticism following a widespread IT outage caused by a problem with CrowdStrike’s security software, which impacted numerous businesses and public services.
While Ives continues to regard CrowdStrike as a top-tier cybersecurity provider, the disruption serves as a reminder that Microsoft could benefit from expanding its own cybersecurity capabilities, and the end of the Wiz deal may further facilitate this opportunity.