Wiz’s decision to back out of a proposed $23 billion acquisition by Google could significantly impact the tech landscape, particularly affecting Microsoft. Wiz, an Israeli cybersecurity startup, opted not to proceed with the acquisition as CEO Assaf Rappaport expressed that it was a “tough” choice aimed at focusing on the company’s goal of achieving $1 billion in annual revenue and pursuing an IPO.
The acquisition would have enhanced Google’s cybersecurity services, especially following a recent major outage linked to CrowdStrike, a key player in the industry. Analyst Dan Ives from Wedbush noted that the deal fell through due to investor apprehension and ongoing antitrust concerns surrounding Google, which has faced heavy scrutiny and recently concluded one of its major legal trials initiated by the Department of Justice.
Ives indicated that the absence of this acquisition will create ripple effects throughout the sector, suggesting that Google will continue to invest in expanding its cybersecurity capabilities. He also anticipates that Microsoft will take proactive measures to strengthen its cybersecurity offerings in the months ahead, possibly pursuing its own acquisitions.
The recent global IT outage tied to a faulty update in CrowdStrike’s software, which disrupted businesses and operations relying on Microsoft’s systems, has further highlighted the need for improvement in cybersecurity measures. Ives maintains that while CrowdStrike remains a top player in cybersecurity, the incident underscores a potential opportunity for Microsoft to enhance its own defenses, particularly in light of Google’s failed acquisition of Wiz.