Wiz’s decision to reject Google’s $23 billion acquisition offer could have significant consequences for the technology sector, particularly for Microsoft.
Wiz, an Israeli cybersecurity startup, opted not to proceed with the deal, as CEO Assaf Rappaport expressed a desire to focus on growing the company towards generating $1 billion in annual revenue and pursuing an initial public offering (IPO). The announcement comes on the heels of a major cybersecurity incident involving CrowdStrike, which affected numerous companies and raised concerns about cybersecurity resilience in the industry.
Wedbush analyst Dan Ives indicated in a research note that the failed acquisition is partly due to investor apprehensions and ongoing antitrust scrutiny facing Google. The tech giant is navigating serious legal challenges, having recently concluded a trial related to antitrust issues brought forth by the Department of Justice.
Ives predicted that the cancellation of the Wiz deal will have wider implications for the cybersecurity landscape. Despite this setback, he believes Google will continue to prioritize expanding its cybersecurity capabilities. Similarly, Ives suggested that Microsoft might take this opportunity to enhance its own cybersecurity offerings over the next year or so.
The need for Microsoft to strengthen its cybersecurity portfolio has become more pressing following a global IT outage linked to a flawed software update from CrowdStrike, which disrupted operations for many businesses and even affected flights. While Ives maintains that CrowdStrike remains a leader in cybersecurity, the recent incident highlights vulnerabilities that could prompt Microsoft to take further steps in fortifying its defenses amidst rising competition and challenges in the sector.