Wiz’s decision to back out of a deal with Google could have significant repercussions for Microsoft and the broader tech industry. The Israeli cybersecurity startup was poised to be acquired by Google for $23 billion, but CEO Assaf Rappaport announced on Tuesday that the company chose to reject the offer to focus on increasing annual revenue to $1 billion and heading towards an IPO.
The acquisition would have enhanced Google’s cybersecurity capabilities, particularly following a major outage last week caused by CrowdStrike, a leading company in the sector. Analyst Dan Ives from Wedbush pointed out that the failed deal was influenced by investor concerns and ongoing antitrust investigations involving Google, which recently concluded litigation related to two significant cases by the Department of Justice.
Ives noted that the cancellation of the Wiz acquisition would likely have ripple effects across the technology sector. He anticipated that Google would continue to expand its cybersecurity efforts despite the setback, and he suggested that Microsoft might also take this opportunity to strengthen its cybersecurity platform in the next year to 18 months.
Microsoft faces scrutiny after a widespread IT outage linked to a faulty update from CrowdStrike, which is utilized in its Windows operating systems for cybersecurity. This incident disrupted businesses and essential services globally, highlighting the need for enhanced cybersecurity measures. While Ives regarded CrowdStrike as the leading name in cybersecurity, the recent outage underscores the necessity for Microsoft to improve its cybersecurity offerings, especially in light of Google’s abandoned acquisition of Wiz.