Wiz’s decision to withdraw from the proposed Google acquisition, which was set to be valued at $23 billion, could significantly affect the tech landscape, particularly for Microsoft. Wiz CEO Assaf Rappaport stated that he made the challenging choice to reject the offer to focus on growing the company towards achieving $1 billion in annual revenue and eventually going public.
This acquisition would have enhanced Google’s cybersecurity capabilities, especially in the wake of a substantial outage linked to cybersecurity provider CrowdStrike last week. Wedbush analyst Dan Ives indicated that investor hesitance and ongoing antitrust concerns were key factors in the deal not proceeding. Google has faced increased antitrust scrutiny and recently concluded one of two major trials with the Department of Justice.
Ives noted that the failed acquisition will likely have widespread ramifications within the sector. He anticipates that Google will continue to invest in its cybersecurity initiatives despite the setback, a trend that Microsoft is expected to follow.
He also pointed out that consolidation in the cybersecurity market is overdue, suggesting that Microsoft may seek to enhance its own cybersecurity offerings in the next year to 18 months. Microsoft’s prominence was highlighted recently amidst the global IT outage caused by a problematic update from CrowdStrike, which disrupted various sectors, including businesses, flights, and government operations. While CrowdStrike is still regarded as a leader in cybersecurity, the incident underscores the need for Microsoft to strengthen its cybersecurity capabilities, positioning the company to benefit from the current shift in the market following Google’s failed acquisition of Wiz.