Wiz’s decision to back out of a potential $23 billion acquisition by Google could significantly affect the tech sector, especially Microsoft.
Wiz, an Israeli cybersecurity startup, turned down Google’s offer as CEO Assaf Rappaport expressed the need to focus on growing the company towards achieving $1 billion in annual revenue and preparing for an initial public offering. This acquisition was intended to strengthen Google’s cybersecurity capabilities, particularly in light of a recent major outage caused by CrowdStrike, a leading cybersecurity firm.
Analyst Dan Ives from Wedbush noted that investor apprehensions and ongoing antitrust challenges were pivotal in the collapse of the deal. He indicated that Google has faced considerable antitrust scrutiny and is involved in significant legal battles with the Department of Justice.
Ives emphasized that the fallout from this failed acquisition would send shockwaves throughout the industry. He predicted that Google would likely continue pursuing expansion in cybersecurity, a move that could be mirrored by Microsoft. Ives suggested that the cybersecurity sector is ripe for consolidation and indicated that Microsoft might seek to enhance its cybersecurity capabilities over the next year and a half.
Microsoft recently faced criticism due to a widespread global IT outage linked to a problematic update from CrowdStrike, which compromised its cybersecurity systems and created significant disruptions for users, businesses, and governments. While Ives still considers CrowdStrike a leader in cybersecurity, the outage may signal a pressing need for Microsoft to bolster its cybersecurity offerings, especially with the doors now open following Google’s failed acquisition of Wiz.