Wiz’s decision to withdraw from a deal with Google could significantly affect the tech industry, particularly Microsoft.
The proposed acquisition of the Israeli cybersecurity startup Wiz for $23 billion, which would have been Google’s largest purchase, has been rejected by Wiz. CEO Assaf Rappaport stated that the challenging choice was made to focus on achieving $1 billion in annual revenue and pursuing an initial public offering.
This deal would have enhanced Google’s cybersecurity capabilities at a time when the sector was reeling from a significant outage caused by the cybersecurity firm CrowdStrike last week. Analyst Dan Ives from Wedbush remarked that the collapse of the deal was influenced by investor concerns and ongoing antitrust issues. Google has faced rigorous antitrust scrutiny and recently concluded a trial related to two major cases initiated by the Department of Justice.
Ives noted, “We believe there will be ripple impacts across the sector from this deal not happening.” He anticipates that Google will continue to prioritize strengthening its cybersecurity domain, a pathway that Microsoft is also likely to explore.
He further stated, “We believe consolidation is overdue in the cybersecurity sector, and we would expect Microsoft to potentially go down this path and look to enhance its cybersecurity platform over the coming 12 to 18 months.”
Microsoft was recently under scrutiny due to a major IT outage linked to a problematic update for its cybersecurity software supplied by CrowdStrike. This outage raised concerns among users globally, as reports of the infamous “blue screens of death” surfaced, disrupting various sectors including businesses, airlines, and government operations.
Despite the setback, Ives maintains that CrowdStrike remains a leader in cybersecurity, but the incident signals a need for Microsoft to strengthen its cybersecurity portfolio, especially following Google’s failed acquisition attempt.