Wiz’s decision to walk away from a $23 billion acquisition deal with Google could significantly impact the tech industry, particularly Microsoft. The Israeli cybersecurity startup had been poised to join Google, which was looking to enhance its cybersecurity offerings amidst rising concerns in the sector. However, Wiz CEO Assaf Rappaport opted to reject the offer in favor of focusing on building the company towards $1 billion in annual revenue and preparing for an IPO.
This development comes at a time when Google’s cybersecurity initiatives are under scrutiny following a substantial outage last week caused by CrowdStrike, an industry leader. Analyst Dan Ives from Wedbush noted that the collapse of the deal was likely influenced by investor apprehensions and ongoing antitrust investigations facing Google. The company recently concluded a trial related to one of two major cases brought by the Department of Justice.
Ives suggested that the absence of the Wiz acquisition would have repercussions throughout the industry. He indicated that Google would probably intensify its efforts in the cybersecurity space, a sentiment that could also apply to its competitor, Microsoft. He expressed the expectation that Microsoft might pursue consolidation within the cybersecurity sector over the next year and a half.
The recent global IT outage linked to a faulty CrowdStrike update has further underscored the importance of robust cybersecurity measures for Microsoft. Users worldwide experienced system disruptions, leading to significant operational issues across various sectors. While there are assurances that CrowdStrike remains a leader in cybersecurity, the incident highlights the urgent need for Microsoft to enhance its cybersecurity capabilities. The failed acquisition presents an opportunity for Microsoft to potentially strengthen its position in this critical area.