Wiz’s decision to back out of the potential $23 billion acquisition by Google could significantly impact the tech landscape, particularly for Microsoft. The Israeli cybersecurity company, which aimed to reach $1 billion in annual revenue and pursue an IPO, rejected Google’s offer, opting instead to focus on its growth.
Google’s attempt to acquire Wiz was seen as a move to enhance its cybersecurity services, especially following a notable outage attributed to CrowdStrike that affected users globally last week. Dan Ives, an analyst at Wedbush, noted that investor concerns and ongoing antitrust investigations likely contributed to the deal’s cancellation. Google has faced intense scrutiny regarding its market practices and recently concluded a major trial led by the Department of Justice.
Ives pointed out that the cancellation of the acquisition could lead to significant consequences across the tech sector. He believes that despite the loss of the Wiz deal, Google will continue to invest in expanding its cybersecurity capabilities, a strategy likely mirrored by its competitor, Microsoft.
He suggested that consolidation within the cybersecurity industry is necessary and likely, indicating that Microsoft might consider enhancing its own cybersecurity offerings in the next 12 to 18 months. This comes in light of a global IT outage caused by a faulty update to CrowdStrike’s cybersecurity software, which serves Microsoft’s systems. While CrowdStrike remains a market leader in cybersecurity, the outage may prompt Microsoft to reevaluate and strengthen its cybersecurity strategies further.