Wiz’s decision to back out of a potential $23 billion acquisition by Google could have significant repercussions for the tech industry, especially for Microsoft.
The Israeli cybersecurity startup Wiz, led by CEO Assaf Rappaport, chose to turn down Google’s offer in order to focus on achieving $1 billion in annual revenue and preparing for an initial public offering (IPO). This move would have enhanced Google’s cybersecurity capabilities, particularly after a recent major outage linked to CrowdStrike, a significant player in the industry.
Dan Ives, an analyst at Wedbush, highlighted that concerns from investors and ongoing antitrust challenges contributed to the collapse of the deal. Google has faced increasing scrutiny over its market dominance, recently concluding a trial related to one of two major antitrust cases brought by the Department of Justice.
Ives noted that the failure of the acquisition would ripple through the cybersecurity sector. He anticipates that Google will intensify its efforts to expand its cybersecurity offerings, a trend likely to be mirrored by Microsoft.
Furthermore, Ives suggested that there’s a pressing need for consolidation in the cybersecurity arena, predicting that Microsoft may seek to enhance its cybersecurity platform within the next year or so. Microsoft recently faced scrutiny during a widespread IT outage caused by a flawed update to software provided by CrowdStrike, which affected users globally and disrupted various sectors.
Despite the setback, Ives maintains that CrowdStrike remains a top-tier player in cybersecurity, but suggests that the recent disruptions highlight the need for Microsoft to strengthen its own cybersecurity capabilities, and the abandonment of the Wiz deal further emphasizes this opportunity.