Wiz’s decision to back out of a $23 billion acquisition deal with Google could have significant repercussions for the tech industry, particularly for Microsoft.
The Israeli cybersecurity startup Wiz, led by CEO Assaf Rappaport, chose to decline Google’s offer in order to focus on achieving $1 billion in annual revenue and preparing for an initial public offering (IPO). This acquisition would have enhanced Google’s cybersecurity capabilities, especially following a major incident last week involving a widespread outage from cybersecurity firm CrowdStrike.
Wedbush analyst Dan Ives noted that investor apprehensions and ongoing antitrust challenges faced by Google contributed to the breakdown of the deal. Google recently concluded a trial related to one of two significant antitrust cases brought by the Department of Justice.
Ives emphasized that the fallout from this failed acquisition could ripple throughout the technology sector, suggesting that Google will likely intensify its efforts to grow its cybersecurity operations despite missing out on Wiz. Microsoft, a competitor in this arena, may also seek to enhance its cybersecurity offerings in the coming months.
The need for consolidation in the cybersecurity sector is pressing, according to Ives, who anticipates that Microsoft could pursue additional acquisitions to strengthen its cybersecurity platform.
Microsoft has recently faced scrutiny following a global IT outage linked to a flawed update in its cybersecurity software provided by CrowdStrike. This incident, which resulted in users experiencing system crashes, illustrates the necessity for Microsoft to bolster its cybersecurity measures, a need further highlighted by Google’s failed attempt to acquire Wiz.