Wiz’s decision to withdraw from a proposed acquisition by Google could have significant repercussions for the technology sector, especially concerning Microsoft.
Google aimed to acquire the Israeli cybersecurity firm Wiz for $23 billion, but Wiz’s CEO, Assaf Rappaport, announced on Tuesday that the company would not proceed with the deal. Rappaport described the choice as “tough,” emphasizing Wiz’s commitment to focus on reaching $1 billion in annual revenue and eventually pursuing an IPO.
This acquisition was intended to enhance Google’s cybersecurity capabilities, particularly in the wake of a substantial service disruption linked to CrowdStrike, another major player in the industry. According to Wedbush analyst Dan Ives, investor apprehension and antitrust challenges contributed to the deal’s collapse. Google has been under significant antitrust scrutiny recently and has just concluded one of two critical cases brought by the Department of Justice.
Ives highlighted that the failed deal will likely have broader implications across the sector. He suggested that Google will continue to strengthen its cybersecurity division despite the loss of the Wiz acquisition. Similarly, Microsoft may take this opportunity to enhance its cybersecurity offerings.
Ives expressed his belief that consolidation in the cybersecurity field is necessary, foreseeing Microsoft potentially seeking to augment its security platform over the next year to 18 months.
The situation has put Microsoft in a challenging position, as it was already criticized in the wake of a widespread IT outage caused by a problematic update from CrowdStrike. This incident affected global business operations, travel, and government functions, leading to complaints from users experiencing issues with Microsoft’s software.
Ives maintains that CrowdStrike remains a top-tier player in cybersecurity, yet the outage suggests that Microsoft should consider strengthening its own cybersecurity services, an opportunity that the failed Google deal creates.