Wiz’s decision to back out of its proposed $23 billion acquisition by Google is poised to significantly impact the tech industry, particularly affecting Microsoft.
The Israeli cybersecurity company Wiz, led by CEO Assaf Rappaport, decided against the acquisition to focus on its growth, aiming for $1 billion in annual revenue and a potential initial public offering (IPO). The rejection comes at a time when Google was looking to strengthen its cybersecurity capabilities, especially in light of a recent major outage at CrowdStrike, a major player in the industry.
Wedbush analyst Dan Ives suggested that the collapse of the deal was influenced by investor concerns and ongoing antitrust scrutiny surrounding Google, which has faced rigorous examination in recent years, including a trial from the Department of Justice.
In an email to investors, Ives indicated that the ramifications of this deal falling through would be felt throughout the sector. He predicts that Google will continue to expand its cybersecurity initiatives despite losing Wiz, and Microsoft may seek to enhance its own cybersecurity offerings in the next 12 to 18 months.
This comes after Microsoft faced scrutiny during a large-scale global IT outage caused by a faulty update to its cybersecurity software provided by CrowdStrike. Vulnerabilities highlighted by this event may compel Microsoft to bolster its cybersecurity measures further, and the failed acquisition of Wiz could pave the way for such endeavors.