Wiz’s decision to walk away from a potential $23 billion acquisition by Google could significantly impact the tech sector, particularly Microsoft. The Israeli cybersecurity startup, led by CEO Assaf Rappaport, opted to prioritize its growth with a goal of achieving $1 billion in annual revenue and pursuing an initial public offering, rather than accept Google’s offer.
The potential acquisition was seen as a strategic move for Google, especially following a major outage caused by cybersecurity firm CrowdStrike that affected various industries. In a note to investors, Wedbush analyst Dan Ives pointed out that investor worries and ongoing antitrust challenges contributed to the deal’s collapse. Google has faced heightened scrutiny and recently concluded a major antitrust trial initiated by the Department of Justice.
Ives emphasized that the failure of the Wiz deal would have sector-wide repercussions. He predicted that Google would likely intensify its efforts to strengthen its cybersecurity capabilities, a sentiment that extends to Microsoft as well.
He noted that the cybersecurity sector is ripe for consolidation, suggesting that Microsoft might take strategic steps to enhance its cybersecurity offerings within the next year to 18 months. Microsoft’s recent troubles, highlighted by a global IT outage due to a problematic update from CrowdStrike, underscore the necessity for the company to bolster its cybersecurity infrastructure. Businesses, flights, and government services were disrupted during this incident, leading to widespread discontent among users.
Despite acknowledging that CrowdStrike remains a key player in the cybersecurity field, Ives indicated that the recent outage illustrates a need for Microsoft to reinforce its cybersecurity measures, further opening opportunities following the dissolution of the Wiz acquisition.