Wiz’s decision to withdraw from a potential acquisition by Google, which would have been the company’s largest purchase at $23 billion, could significantly impact the tech sector, particularly Microsoft.
Wiz’s CEO Assaf Rappaport announced the rejection of Google’s offer, citing a desire to focus on growing the company towards an annual revenue target of $1 billion and preparing for an initial public offering (IPO). This move comes at a time when the cybersecurity landscape has already been unsettled by a major outage experienced by CrowdStrike, a prominent industry player.
According to Wedbush analyst Dan Ives, the failure of the deal raises concerns among investors and highlights ongoing antitrust challenges for Google, which has been under heavy scrutiny and recently concluded one of its trials with the Department of Justice.
Ives indicated that the cancellation of the Wiz acquisition could lead to notable effects across the industry. He believes Google will persist in enhancing its cybersecurity presence, and he expects Microsoft to pursue a similar strategy. Ives noted that consolidation in the cybersecurity domain is necessary and anticipated that Microsoft might seek to strengthen its security capabilities in the next 12 to 18 months.
Microsoft faced criticism following the recent global IT outage caused by a problematic update to software provided by CrowdStrike, which affected operations worldwide. While Ives maintains that CrowdStrike sets the benchmark in cybersecurity, the recent disturbances highlight a potential need for Microsoft to enhance its own cybersecurity services, making the need for improvement even more pressing in light of Google’s thwarted acquisition.