Wiz has decided to back out of a proposed $23 billion acquisition deal with Google, which was set to be the tech giant’s largest purchase. This decision is expected to have significant repercussions for the technology sector, particularly for Microsoft.
Wiz, an Israeli cybersecurity startup, made the “tough” choice not to accept Google’s offer as the company aims to reach $1 billion in annual revenue and prepare for an initial public offering (IPO), according to CEO Assaf Rappaport. This acquisition would have strengthened Google’s cybersecurity efforts, especially following a significant outage linked to CrowdStrike, a major player in the industry, recently.
Wedbush analyst Dan Ives noted that the failure of this deal was influenced by investor concerns and ongoing antitrust challenges that Google faces. The company has been under intense scrutiny and recently concluded a trial related to a major antitrust case initiated by the Department of Justice.
Ives emphasized that the collapse of the Wiz deal could create ripple effects across the cybersecurity sector. He believes Google will continue to enhance its cybersecurity offerings despite this setback, and anticipates that Microsoft will also look to expand its cybersecurity capabilities over the next year to 18 months.
Microsoft found itself in an unfavorable situation due to a global IT outage caused by a faulty update to its cybersecurity software from CrowdStrike. This incident led to widespread reports of “blue screens of death” among Microsoft users globally, disrupting various sectors including businesses, airlines, and government operations.
While Ives maintains that CrowdStrike remains a leader in cybersecurity, the recent outage highlights the potential need for Microsoft to strengthen its cybersecurity infrastructure, a gap that the failed Google-Wiz deal may now allow them to address.