Wiz’s decision to back out of a significant acquisition deal with Google is expected to greatly affect the tech sector, particularly Microsoft. The Israeli cybersecurity startup had been in talks to sell itself to Google for $23 billion, but CEO Assaf Rappaport announced on Tuesday that the offer was turned down. He stated that the company intends to focus on achieving $1 billion in annual revenue and pursuing an initial public offering (IPO).
This acquisition would have strengthened Google’s cybersecurity portfolio, especially following a notable outage from CrowdStrike that impacted the industry last week. Analyst Dan Ives from Wedbush noted that concerns from investors and ongoing antitrust issues contributed to the deal’s collapse. Google has been under scrutiny from antitrust regulators and recently concluded a major trial related to such matters.
Ives indicated that the failed acquisition will have broader implications within the cybersecurity field. He speculated that Google will likely continue to prioritize the expansion of its cybersecurity offerings, and Microsoft may also intensify its efforts in this area.
In light of the situation, Ives predicted that consolidation within the cybersecurity industry is overdue and that Microsoft could seek to enhance its cybersecurity platform over the next year or so. He pointed out that Microsoft faced significant challenges recently due to a global IT outage linked to CrowdStrike’s software, which disrupted numerous sectors including businesses and government operations. While Ives maintains CrowdStrike’s position as a leading cybersecurity provider, the incident suggests that Microsoft needs to strengthen its cybersecurity framework, putting it in a better position following Google’s unsuccessful bid for Wiz.