The recent decision by Wiz to withdraw from a proposed $23 billion acquisition by Google could have significant repercussions for the tech industry, particularly for Microsoft.
Wiz, an Israeli cybersecurity startup, opted not to proceed with the deal, as CEO Assaf Rappaport cited the desire to focus on building the company toward achieving $1 billion in annual revenue and preparing for an IPO. This decision came shortly after a major cybersecurity incident involving CrowdStrike, which caused a widespread outage in the industry.
Wedbush analyst Dan Ives suggested that the failure of this deal stemmed from investor concerns and ongoing antitrust challenges facing Google. The tech giant has been under increasing scrutiny from regulators and recently concluded a trial related to one of its two significant antitrust cases initiated by the Department of Justice.
Ives expressed that the cancellation of the Wiz deal will have ripple effects across the cybersecurity sector. He anticipates that Google will continue to aggressively expand its cybersecurity capabilities, and he believes Microsoft may also pursue opportunities to strengthen its offerings in this area over the next 12 to 18 months.
The recent issues surrounding Microsoft, particularly the outage caused by a problematic update to its cybersecurity software supplied by CrowdStrike, highlighted the need for the company to enhance its cybersecurity measures. As businesses and government operations faced disruptions during the outage, the incident raised questions about the robustness of existing systems.
Despite the recent challenges, Ives maintains that CrowdStrike remains a leading name in cybersecurity, and the dissolution of the Wiz acquisition may create further opportunities for Microsoft to improve its own cybersecurity platform.