Wiz’s decision to back out of its proposed $23 billion acquisition by Google is expected to significantly impact the technology sector, particularly Microsoft. The Israeli cybersecurity startup had been looking to enhance its business independently and pursue annual revenues of $1 billion along with an initial public offering.
Google’s bid for Wiz was aimed at strengthening its cybersecurity capabilities following a significant outage that affected the cybersecurity company CrowdStrike. According to Wedbush analyst Dan Ives, the failure of the acquisition was influenced by investor apprehensions and ongoing antitrust challenges facing Google, which has recently concluded a trial related to its legal issues with the Department of Justice.
Ives noted in a communication to investors that the cancellation of the deal is likely to create ripple effects across the industry. He suggested that Google would continue to expand its cybersecurity initiatives despite the failed acquisition, and Microsoft may also pursue similar strategies to enhance its cybersecurity offerings over the coming year and a half.
The need for consolidation in the cybersecurity sector has been emphasized, especially after Microsoft experienced notable issues during a widespread service outage linked to a problematic update from CrowdStrike. This incident raised alarms about the robustness of Microsoft’s cybersecurity measures, indicating an opportunity for improvement in its capabilities.