Wiz’s decision to back out of a proposed $23 billion acquisition by Google could significantly impact the tech industry, particularly Microsoft.
The Israeli cybersecurity startup Wiz, led by CEO Assaf Rappaport, recently declined Google’s offer in a move aimed at focusing on its own growth and aspirations to reach $1 billion in annual revenue and eventually launch an IPO. This acquisition would have strengthened Google’s cybersecurity efforts, especially in light of a recent major outage that affected the industry, stemming from CrowdStrike, a leading cybersecurity firm.
Wedbush analyst Dan Ives noted that investor concerns and ongoing antitrust issues contributed to the failure of the deal. Google has faced increased scrutiny from antitrust regulators over recent years and has recently concluded a trial involving a significant case led by the Department of Justice.
In an email to investors, Ives pointed out that the collapse of the Wiz deal would likely have “ripple impacts” across the entire sector. He suggested that Google will still focus on expanding its cybersecurity capabilities despite this setback, a strategy that Microsoft is also expected to pursue.
Ives indicated that consolidation in the cybersecurity sector is needed and anticipated that Microsoft would look to enhance its own cybersecurity platform in the next 12 to 18 months. This comes after Microsoft faced challenges during a global IT outage linked to a flawed update from CrowdStrike, which disrupted services for users worldwide.
Ives acknowledged that while CrowdStrike remains a benchmark in cybersecurity, the recent incident highlights a pressing need for Microsoft to strengthen its cybersecurity offerings, with the failed deal with Wiz potentially paving the way for further opportunities in the future.