Wiz’s decision to reject Google’s $23 billion acquisition offer could have significant repercussions for the tech industry, particularly for Microsoft.
The Israeli cybersecurity startup had been a prime target for Google, aiming to strengthen its cybersecurity capabilities after a recent major outage linked to CrowdStrike. Wiz CEO Assaf Rappaport stated that the challenging choice to turn down Google’s proposal was driven by the goal of steering Wiz towards achieving $1 billion in annual revenue and ultimately pursuing an initial public offering (IPO).
Wedbush analyst Dan Ives highlighted in a research note that investor apprehensions and ongoing antitrust investigations contributed to the deal’s collapse. Google has faced considerable antitrust scrutiny in recent years, culminating in its recent trial linked to two major cases from the Department of Justice.
Ives anticipates that the failed acquisition will create ripple effects within the cybersecurity sector. He suggests that Google will likely intensify its efforts to expand its cybersecurity capabilities, a sentiment that may also apply to Microsoft.
The analyst noted that the cybersecurity market is ripe for consolidation, speculating that Microsoft might seek to enhance its cybersecurity platform in the next 12 to 18 months. This speculation follows a high-profile incident where Microsoft was adversely affected by a global IT outage caused by a problematic CrowdStrike update. This incident saw widespread disruptions and highlighted potential vulnerabilities within Microsoft’s cybersecurity framework.
While Ives maintains that CrowdStrike remains a premier player in the cybersecurity arena, the recent outage signals an opportunity for Microsoft to strengthen its position in the sector following Google’s deal dissolution.