Wiz’s decision to back out of a potential $23 billion acquisition by Google could significantly impact the tech industry, particularly Microsoft. The Israeli cybersecurity startup opted not to accept Google’s offer, with CEO Assaf Rappaport stating that he made the difficult choice to focus on building Wiz towards generating $1 billion in annual revenue and pursuing an initial public offering.
This acquisition, if it had proceeded, would have strengthened Google’s position in cybersecurity, especially following a major disruption in the industry caused by a CrowdStrike outage last week. Analyst Dan Ives from Wedbush noted that concerns from investors and antitrust challenges contributed to the deal’s collapse. Google has faced severe scrutiny regarding antitrust issues and recently concluded its trial in a significant case brought by the Department of Justice.
Ives suggested that the failure of this acquisition would create repercussions across the tech sector, predicting that Google would intensify its efforts to expand its cybersecurity capabilities, a trend expected to be mirrored by Microsoft. He also indicated that consolidation in the cybersecurity sector is overdue, and Microsoft might be inclined to enhance its own cybersecurity platform in the next 12 to 18 months.
The situation became more critical for Microsoft after a global IT outage last Friday, triggered by a problematic update in its cybersecurity software from CrowdStrike. This incident drew attention to Microsoft’s reliance on CrowdStrike for security measures within its Windows operating system, leading to disruptions across various sectors, including businesses and government operations.
Although Ives still considers CrowdStrike a leading name in cybersecurity, the recent outage suggests that Microsoft must strengthen its cybersecurity offerings, especially in light of the missed opportunity with Wiz.