Wiz’s decision to back out of a potential $23 billion acquisition by Google has significant implications for the tech sector, particularly for Microsoft. The Israeli cybersecurity firm, led by CEO Assaf Rappaport, opted to decline the offer in favor of focusing on its growth strategy aimed at generating $1 billion in annual revenue and pursuing an initial public offering.
The acquisition would have strengthened Google’s position in cybersecurity, especially following a recent major outage at CrowdStrike, a prominent cybersecurity provider. According to Wedbush analyst Dan Ives, the failed deal stemmed from investor apprehensions and ongoing antitrust issues surrounding Google, which is currently facing extensive scrutiny and has recently completed a trial related to two significant cases from the Department of Justice.
Ives noted that the failure of the acquisition could lead to sector-wide ramifications. He indicated that Google is likely to continue enhancing its cybersecurity capabilities, a trend that Microsoft will likely follow as well. Ives suggested that there is a pressing need for consolidation within the cybersecurity industry and anticipates that Microsoft will seek to strengthen its cybersecurity platform in the next year to 18 months.
Microsoft faced scrutiny recently due to a widespread IT outage linked to a faulty update in its cybersecurity software from CrowdStrike. This incident highlighted vulnerabilities as users worldwide reported encountering system failures, leading to disruptions across various sectors. While Ives maintains that CrowdStrike remains a top player in cybersecurity, the incident underscores the necessity for Microsoft to bolster its cybersecurity efforts, especially in light of Google’s stalled acquisition.