Wiz’s decision to walk away from a potential $23 billion acquisition by Google is expected to have significant repercussions for the tech industry, particularly affecting Microsoft.
Wiz, an Israeli cybersecurity startup, opted to reject Google’s offer this week, with CEO Assaf Rappaport stating that he made the “difficult” choice to prioritize the company’s growth and aim for $1 billion in annual revenue and an initial public offering (IPO).
Had the deal gone through, it would have strengthened Google’s cybersecurity division, especially in light of a recent major outage linked to CrowdStrike, a leading player in the field. Following this announcement, Wedbush analyst Dan Ives noted that investor fears and antitrust challenges contributed to the abandonment of the deal. Google has been under increasing antitrust scrutiny and recently concluded a significant trial with the Department of Justice.
Ives indicated that the fallout from this deal not happening would reverberate across the tech sector. He suggested that Google will intensify its efforts to enhance its cybersecurity capabilities despite the failed acquisition, while Microsoft is likely to follow suit.
Ives stated, “We believe consolidation is overdue in the cybersecurity sector and we would expect Microsoft to potentially explore this path to strengthen its cybersecurity platform in the next 12 to 18 months.”
The spotlight has recently been on Microsoft due to a significant global IT outage resulting from a flawed update to CrowdStrike’s cybersecurity software. This incident caused widespread disruptions, affecting businesses, flights, and government operations, as Microsoft’s Windows relies on CrowdStrike for protection against cyber threats.
While Ives still regards CrowdStrike as a leading cybersecurity provider, the outage may serve as a wake-up call for Microsoft to enhance its own cybersecurity measures, further highlighted by the collapse of the Google-Wiz deal.