Wiz’s decision to walk away from a proposed acquisition by Google could have significant implications for the tech sector, particularly for Microsoft.
Google had intended to acquire the Israeli cybersecurity startup Wiz for an estimated $23 billion, but the offer was recently declined. Wiz CEO Assaf Rappaport stated that he made the difficult choice to reject the acquisition to focus on achieving an annual revenue goal of $1 billion and preparing for a future initial public offering.
This acquisition would have enhanced Google’s cybersecurity capabilities, especially following a recent significant industry disruption caused by CrowdStrike, a major player in the field. Analyst Dan Ives from Wedbush suggested that investor apprehensions and ongoing antitrust issues influenced the breakdown of the deal. Google has faced considerable antitrust scrutiny over the past few years and recently concluded a trial related to one of its major cases with the Department of Justice.
Ives commented that the fallout from this failed acquisition will likely have ripple effects throughout the cybersecurity sector. He noted that Google will probably increase its efforts to expand its cybersecurity presence, and its competitor Microsoft may also look to strengthen its cybersecurity offerings in the upcoming year and a half.
Microsoft found itself in a challenging situation during the widespread IT failure linked to a problematic update from CrowdStrike last Friday. This outage impacted users globally, including businesses, flights, and government services, leading to the infamous “blue screen of death” displayed on many Windows devices. While Ives has called CrowdStrike the “gold standard” in cybersecurity, recent events suggest that Microsoft may need to enhance its own cybersecurity solutions, and the failed Wiz deal could present further opportunities for them to do so.