Wiz’s decision to back out of a potential $23 billion acquisition by Google has significant repercussions for the tech sector, especially for Microsoft. The Israeli cybersecurity startup, led by CEO Assaf Rappaport, chose to reject Google’s offer to focus on achieving $1 billion in annual revenue and pursuing an initial public offering (IPO) instead.
This acquisition would have enhanced Google’s cybersecurity efforts following a recent major outage affecting the industry, which was linked to CrowdStrike. Analyst Dan Ives from Wedbush indicated that the deal fell through due to investor apprehensions and antitrust challenges, a reflection of ongoing scrutiny that Google faces from regulators. The company recently concluded a trial concerning its business practices.
Ives suggests that the cancellation will have “ripple impacts” throughout the industry, noting that Google is expected to persist in expanding its cybersecurity initiatives despite the setback with Wiz, and so will Microsoft. He emphasized that consolidation within the cybersecurity field is overdue, predicting that Microsoft may enhance its cybersecurity platform in the next year to 18 months.
Microsoft faced scrutiny after a global IT outage caused by a problematic update to its cybersecurity software from CrowdStrike, which raised concerns about the reliability of its cybersecurity measures. The incident disrupted various sectors, leading to widespread reports of issues including the famous “blue screens of death.” While Ives maintains that CrowdStrike is still a leading name in cybersecurity, the recent outage underscores the need for Microsoft to strengthen its own cybersecurity capabilities, a necessity that could be further propelled by Google’s failed acquisition attempt.