Wiz’s decision to back out of a potential $23 billion acquisition by Google could have significant repercussions for the tech industry, particularly for Microsoft.
Wiz, an Israeli cybersecurity startup, opted not to accept Google’s offer, with CEO Assaf Rappaport stating that the company aims to continue its growth toward achieving $1 billion in annual revenue and plans for an initial public offering (IPO). The acquisition would have enhanced Google’s cybersecurity capabilities, especially following a recent major outage experienced by CrowdStrike, a key player in the industry.
Wedbush analyst Dan Ives noted in a report that investor apprehensions and ongoing antitrust investigations contributed to the collapse of the deal. Google has been under scrutiny from regulators and recently concluded a high-profile trial concerning antitrust issues.
Ives suggested that the failure of this acquisition could create significant ripple effects across the technology sector. He believes that Google will likely intensify efforts to expand its cybersecurity initiatives despite the missed opportunity with Wiz. Similarly, he speculated that Microsoft might look to strengthen its own cybersecurity offerings within the next year to 18 months.
The analysis comes in light of a recent global IT disruption linked to CrowdStrike’s cybersecurity systems, impacting Microsoft as it relies on CrowdStrike’s software to enhance its security measures. Users reported widespread issues, referred to as the “blue screens of death,” which severely affected various sectors, including business operations and airlines. While Ives maintains that CrowdStrike remains a leading force in cybersecurity, the outage indicates that Microsoft may need to enhance its cybersecurity capabilities, and the collapse of the Wiz deal may further this impetus.