Wiz’s decision to walk away from a potential $23 billion acquisition by Google could significantly affect the tech landscape, particularly impacting Microsoft.
Wiz CEO Assaf Rappaport announced on Tuesday that the firm rejected Google’s offer to continue its trajectory towards achieving $1 billion in annual revenue and eventually pursuing an initial public offering (IPO). This would have been Google’s largest acquisition, aimed at enhancing its cybersecurity capabilities following a major service disruption linked to cybersecurity giant CrowdStrike last week.
Analyst Dan Ives from Wedbush indicated that antitrust concerns and investor apprehensions were key factors behind the deal’s collapse. With Google facing mounting scrutiny from regulators, it recently concluded a trial related to one of two significant cases initiated by the Department of Justice.
Ives expressed in a statement to investors that the fallout from this failed acquisition is likely to have broader implications within the industry. He believes Google will persist in expanding its cybersecurity efforts, and Microsoft will also take steps to enhance its position in the cybersecurity market.
Ives highlighted that the cybersecurity sector is ripe for consolidation, suggesting that Microsoft might consider strengthening its cybersecurity platform in the upcoming 12 to 18 months. This comes in light of recent challenges faced by Microsoft, particularly relating to an extensive IT outage caused by a faulty update from CrowdStrike, which impacted users globally.
Despite the CrowdStrike incident, which raised questions about the robustness of Microsoft’s cybersecurity measures, Ives still regards CrowdStrike as the benchmark for cybersecurity solutions. However, the recent developments suggest that Microsoft may need to bolster its cybersecurity offerings, especially as Google’s failed acquisition adds urgency to addressing these concerns.