Wiz’s decision to walk away from a $23 billion acquisition deal with Google could significantly affect the technology sector, particularly Microsoft. Wiz, an Israeli cybersecurity startup, opted not to proceed with the offer in order to focus on achieving $1 billion in annual revenue and an initial public offering.
Search engine giant Google had aimed to enhance its cybersecurity portfolio with the acquisition, especially after a major disruption in the industry caused by cybersecurity firm CrowdStrike last week. Following Wiz’s rejection of the deal, Wedbush analyst Dan Ives noted that concerns from investors and ongoing antitrust challenges played a role in the decision. Google has faced intense antitrust scrutiny recently, culminating in its trial related to two major cases from the Department of Justice.
Ives mentioned that the fallout from this abandoned acquisition will likely resonate throughout the cybersecurity sector and suggested that Google would probably continue to expand its cybersecurity capabilities despite not acquiring Wiz. Similarly, he predicted that Microsoft may pursue consolidation opportunities within the cybersecurity industry over the next 12 to 18 months to strengthen its platform.
Microsoft recently found itself in a challenging situation due to a widespread global IT outage linked to a bad update of CrowdStrike’s cybersecurity software. Users faced significant disruptions, which highlighted vulnerabilities in Microsoft’s system. Although Ives maintains that CrowdStrike is the leading provider of cybersecurity solutions, the recent incident may prompt Microsoft to enhance its own cybersecurity offerings, particularly following the collapse of the Wiz acquisition.