Wiz’s decision to walk away from a potential $23 billion acquisition by Google could have significant ramifications for Microsoft and the broader tech landscape. The Israeli cybersecurity firm had been in negotiations with Google, but ultimately CEO Assaf Rappaport chose to reject the offer, opting instead to focus on growing Wiz towards a billion-dollar annual revenue and preparing for an initial public offering.
This deal would have strengthened Google’s cybersecurity division, particularly following a major outage attributed to CrowdStrike that affected many companies last week. Analyst Dan Ives from Wedbush noted that investor apprehensions and ongoing antitrust challenges were factors that contributed to the collapse of the deal. Google has faced intense scrutiny regarding antitrust issues and recently concluded one of its high-profile trials initiated by the Department of Justice.
Ives indicated that the failed acquisition would send shockwaves through the tech sector. He anticipates that Google will continue to aggressively pursue growth in its cybersecurity capabilities, a strategy that may also be mirrored by its competitor Microsoft.
He mentioned that consolidation in the cybersecurity sector is overdue and predicted that Microsoft might seek to enhance its cybersecurity offerings in the next year and a half. This comes in the wake of a significant global IT outage linked to a flawed update from CrowdStrike, which is used by Microsoft’s Windows to bolster cybersecurity. The incident disrupted operations across various sectors worldwide, highlighting potential vulnerabilities in Microsoft’s existing cybersecurity measures.
While Ives still views CrowdStrike as a leading player in cybersecurity, the recent outage suggests that there may be a need for Microsoft to strengthen its security solutions, especially given the window of opportunity presented by Google’s failed acquisition of Wiz.