Wiz’s decision to withdraw from a potential deal with Google, which would have represented the tech giant’s largest acquisition to date, is likely to have significant repercussions for Microsoft.
The Israeli cybersecurity startup, Wiz, turned down Google’s $23 billion offer, with CEO Assaf Rappaport stating that this difficult choice was made to prioritize the company’s growth towards achieving $1 billion in annual revenue and pursuing an initial public offering (IPO).
The anticipated acquisition would have strengthened Google’s cybersecurity division, particularly following a major outage last week caused by CrowdStrike, a key player in the industry. Following the news of the deal’s collapse, Wedbush analyst Dan Ives suggested that concerns from investors and ongoing antitrust challenges contributed to the failed agreement. Google has faced mounting scrutiny from antitrust regulators, recently concluding a trial concerning one of two significant cases brought by the Department of Justice.
Ives noted that the fallout from the failed deal may generate ripple effects throughout the technology sector. He believes that Google will likely continue to focus on enhancing its cybersecurity presence, a strategy that will also likely be pursued by Microsoft in the months to come.
Ives anticipates that with consolidation in the cybersecurity space being overdue, Microsoft may seek to strengthen its own cybersecurity offerings over the next 12 to 18 months. This comes on the heels of a global IT outage attributed to a faulty update in CrowdStrike’s cybersecurity software, which prompted widespread disruptions across various sectors reliant on Microsoft products.
Despite Ives confirming that CrowdStrike remains a leading name in cybersecurity, the recent outage highlights a potential advantage for Microsoft to enhance its cybersecurity capabilities, with the interruption of Google’s acquisition providing further opportunity for growth in this area.