Wiz’s decision to back out of a $23 billion acquisition by Google could have significant repercussions for the technology sector, particularly for Microsoft.
The Israeli cybersecurity firm Wiz, led by CEO Assaf Rappaport, declined Google’s acquisition offer, choosing instead to focus on reaching an annual revenue of $1 billion and planning for an initial public offering (IPO). This decision comes at a time when the cybersecurity industry is dealing with recent challenges, highlighted by a major outage from CrowdStrike that affected many businesses.
Analyst Dan Ives from Wedbush noted that the failure of the deal was influenced by investor apprehensions and ongoing antitrust scrutiny facing Google. He emphasized that this situation could create ripple effects throughout the industry. Although the Wiz acquisition fell through, Ives believes Google will continue to work on enhancing its cybersecurity services, and Microsoft is likely to follow suit.
Ives suggested that consolidation within the cybersecurity market is overdue, indicating that Microsoft may seek to strengthen its cybersecurity platform in the next year to eighteen months. This comes in light of a recent global IT outage linked to a faulty update from CrowdStrike, the company that provides cybersecurity solutions for Microsoft’s Windows systems. The outage caused widespread disruptions, raising concerns over Microsoft’s cybersecurity measures.
While CrowdStrike remains recognized as a leading provider in the field, the recent incident underscores the need for Microsoft to bolster its cybersecurity capabilities, especially following Google’s unsuccessful attempt to acquire Wiz.