Wiz’s decision to back out of a potential acquisition by Google could have significant repercussions for the tech industry, particularly for Microsoft. The Israeli cybersecurity startup had been in discussions for a $23 billion acquisition but declined the offer this week. Wiz CEO Assaf Rappaport stated that he made the “tough” choice to turn down the substantial sum in order to focus on growing the company’s revenues toward a goal of $1 billion annually and preparing for an IPO.
This acquisition would have strengthened Google’s cybersecurity division, especially following a recent massive outage linked to CrowdStrike, a significant player in the industry. Analyst Dan Ives from Wedbush noted that investor apprehensions and ongoing antitrust issues contributed to the collapse of the deal. Google is currently under intense scrutiny from antitrust regulators and recently concluded a trial related to one of two major cases filed by the Department of Justice.
Ives indicated that the failure of this deal would have broader implications across the technology sector. He anticipates that Google will continue to enhance its cybersecurity efforts despite the setback with Wiz, and suggests that Microsoft may also seek to strengthen its cybersecurity platform in the coming months.
Moreover, Microsoft faced criticism due to the global IT outage caused by a problematic update to the cybersecurity software provided by CrowdStrike. The incident disrupted operations for businesses, flights, and government agencies, highlighting the need for Microsoft to enhance its own cybersecurity measures. While Ives acknowledges that CrowdStrike remains a leader in cybersecurity, the recent outage underscores the necessity for improvements, further opening the door for Microsoft’s potential acquisitions in the cybersecurity space.