Wiz’s decision to walk away from a potential acquisition by Google, which would have been the tech giant’s largest purchase, is likely to have significant ramifications for the technology sector, particularly for Microsoft.
Wiz, an Israeli cybersecurity startup, rejected Google’s offer of $23 billion. CEO Assaf Rappaport explained that turning down the substantial offer was a difficult but necessary decision to focus on growing Wiz towards its goal of achieving $1 billion in annual revenue and pursuing an initial public offering.
The potential acquisition was seen as a way for Google to enhance its cybersecurity capabilities, especially in light of a major outage affecting the sector recently, attributed to CrowdStrike. Dan Ives, an analyst at Wedbush, pointed out in his research note that concerns from investors and ongoing antitrust challenges led to the deal’s collapse. Google has faced intense scrutiny from antitrust regulators and recently concluded one of two major trials initiated by the Department of Justice.
Ives noted that the aborted deal is likely to have broader effects across the industry. Despite the setback, he believes Google will intensify its efforts to grow its cybersecurity operations. Similarly, he anticipates that Microsoft will seek to strengthen its cybersecurity offerings in the coming year and a half.
Microsoft found itself in the news recently due to a widespread IT outage caused by a problematic update to its cybersecurity software supplied by CrowdStrike. This incident affected numerous users globally, leading to significant disruptions across various sectors. While Ives mentioned that CrowdStrike remains a leading player in cybersecurity, the outage highlights the importance of enhancing cybersecurity measures, creating an opportunity for Microsoft to expand its own capabilities in this area following Google’s failed acquisition of Wiz.