Wiz’s decision to back out of a potential $23 billion acquisition by Google could have significant repercussions for Microsoft and the broader tech industry. The Israeli cybersecurity startup, led by CEO Assaf Rappaport, opted to decline Google’s offer to focus on achieving $1 billion in annual revenue and preparing for an IPO.
The failed acquisition would have enhanced Google’s cybersecurity division, particularly after a recent major outage linked to CrowdStrike, a leading cybersecurity firm. Analyst Dan Ives from Wedbush noted that the collapse of the deal was influenced by investor apprehension and ongoing antitrust concerns surrounding Google, which is currently embroiled in two significant cases initiated by the Department of Justice.
Ives emphasized that the implications of this deal’s failure will resonate throughout the industry. He anticipates that Google will remain committed to expanding its cybersecurity capabilities, a strategy that will also likely be adopted by Microsoft.
Ives expressed that there is a pressing need for consolidation within the cybersecurity sector, predicting that Microsoft may pursue similar enhancements to its cybersecurity offerings in the next year to 18 months. The call for Microsoft to strengthen its cybersecurity portfolio has intensified following a widespread IT outage earlier caused by an update issue with CrowdStrike’s software, which led to disruptions for Microsoft users globally.
Despite the recent turmoil, Ives still regards CrowdStrike as a “gold standard” within cybersecurity, but he suggests that the situation highlights the urgency for Microsoft to enhance its own security measures further, especially in light of Google’s abandoned acquisition.