Wiz’s decision to walk away from a potential $23 billion acquisition by Google has significant implications for the tech sector, particularly for Microsoft. The Israeli cybersecurity startup, led by CEO Assaf Rappaport, chose to decline the offer in pursuit of an independent path aimed at achieving $1 billion in annual revenue and planning for an initial public offering (IPO).
The acquisition would have enhanced Google’s cybersecurity division, especially in light of a recent major outage involving cybersecurity firm CrowdStrike, which raised concerns across the industry. Analyst Dan Ives from Wedbush noted that issues related to investor apprehensions and antitrust challenges were factors that contributed to the deal’s collapse. Google has faced extensive antitrust scrutiny in recent years and recently completed a trial in one of two significant cases brought by the Department of Justice.
Ives pointed out that the cancellation of the Wiz acquisition may lead to broader repercussions in the cybersecurity sector, but it is likely that Google will sustain its efforts to expand its cybersecurity capabilities. Microsoft is expected to follow a similar path.
The analyst emphasized that the need for consolidation in the cybersecurity field is pressing, and indicated that Microsoft may seek to enhance its own cybersecurity operations in the next 12 to 18 months. This comes in the wake of a global IT outage linked to a problematic update from CrowdStrike, which serves as a cybersecurity solution for Microsoft’s Windows. Users worldwide experienced significant disruptions, showcasing the vulnerabilities in the current cybersecurity landscape.
While acknowledging CrowdStrike’s reputation as a leading entity in cybersecurity, Ives suggested that Microsoft might consider strengthening its security measures further, particularly in light of Google’s unfulfilled deal for Wiz.